ConocoPhillips (COP) and 2 Small-Cap Companies Are Targets of Insider Buying

ConocoPhillips (NYSE:COP) also had one of its Directors buy some shares last week. Director Arjun N. Murti bought 7,500 shares on Wednesday through multiple transactions at prices varying from $39.20 to $39.25 per unit, increasing his stake to 12,500 shares. The Director acquired his initial stake during the final month of 2015, although he has been serving as a member of the Board since January 2015.

The timing of the first trades of new directors or executives may be very telling on some occasions, especially when those trades come significantly later than their appointment. The independent exploration and production (E&P) company has seen its shares decline by 34% over the past year or so, but there are signs that the stock has now bottomed-out. Specifically, the stock is up by 23% over the past month alone and could go even higher should crude oil prices continue their recovery trajectory. ConocoPhillips’ portfolio mainly comprises resource-rich North American unconventional assets and oil sands assets; lower-risk legacy assets in North America, Europe, Asia and Australia; as well as several major international developments.

In December 2015, ConocoPhillips announced its plans to make capital investments amounting to $7.7 billion during 2016, but the company cut its capital expenditures guidance to $6.4 billion earlier this year due to lower crude oil prices and credit tightening in the industry. The company also cut its quarterly dividend payment by 66% to $0.25 per share, in an attempt to maintain the health of its balance sheet. ConocoPhillips primary uses of cash in 2015 included $10.05 billion to fund capital expenditures and investments; $3.66 billion to pay dividends; and $103 million to reduce its debt load. The company generated $7.6 billion in cash from continuing operations in 2015, so the $2.37 billion in cash and cash equivalents available at the end of 2015 and the expected cash from continuing operations during 2016 appear to be enough to cover expenses and contractual obligations this year. The number of hedge funds in our database with stakes in the E&P company dropped to 31 from 44 during the December quarter. Donald Yacktman’s Yacktman Asset Management owns 4.66 million shares of ConocoPhillips (NYSE:COP) as of December 31.

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