In this article, we discuss 10 oil stocks that insiders and executives are selling. If you want to skip our detailed analysis of these stocks, go directly to Insiders and Executives are Selling These 5 Oil Stocks.
Insider trading is an effective indicator of a company’s internal affairs. Usually, when insiders cash out, it is because they are privy to some information that has not been made public, and shareholders often follow their footsteps. However, sometimes when insiders retain large positions despite selling, it might only be a quick sell off to liquidate some assets.
In 2021, CEOs and corporate insiders sold a record $69 billion in stock, ahead of rising taxes and volatile share prices. At the end of November 2021, insider selling was up 30% from 2020 to $69 billion. Satya Nadella, Jeff Bezos, and Elon Musk all cashed out of their stock at the highest pace on record in 2021.
Neal Dingmann, managing director of energy research at Truist, joined a CNBC program on March 10 to discuss oil stocks amid the Russia-Ukraine war. According to Dingmann, the crude market has an incredibly high geopolitical risk premium embedded in stock prices, but this will not result in oil companies producing more barrels, since the market supply chain is already tight. Instead of producing more oil given the higher cash inflows due to inflated prices, oil companies are likely to indulge in buybacks and deleveraging, or even higher dividend payouts.
Amid rising prices, some insiders and executives from prominent oil companies are selling off their stocks and taking profits. In addition to the companies discussed below, some of the prominent oil stocks to watch in the current market climate are Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP).
Photo by Zbynek Burival on Unsplash
Our Methodology
We used Insider Monkey’s latest insider trading data to calculate the number of shares sold by insiders and executives at prominent oil companies from March 1 to March 11, 2022. We have also mentioned the hedge fund sentiment around each stock, which was assessed from the 924 elite funds tracked by Insider Monkey as of December 2021.
Insiders and Executives are Selling These Oil Stocks
10. Talos Energy Inc. (NYSE:TALO)
Number of Hedge Fund Holders: 14
Talos Energy Inc. (NYSE:TALO) was founded in 2011 and is based in Houston, Texas. The company focuses on the exploration and production of oil and natural gas properties in the United States, the Gulf of Mexico, and offshore Mexico. In an extraordinary week for commodities of all kinds, on March 4, the top 20 gainers in energy and natural resources included Talos Energy Inc. (NYSE:TALO), which gained 28.1%.
On March 8, Riverstone Energy Partners V, a large shareholder and director of Talos Energy Inc. (NYSE:TALO), sold off 4 million shares of the company, priced at $17.41 per share. In the last 12 months, insider selling amounted to $226.4 million, whereas insider purchases over the period were worth only $343,000. The total insider ownership at Talos Energy Inc. (NYSE:TALO) is 0.25%.
Talos Energy Inc. (NYSE:TALO) on February 25 jumped to its highest in nearly five months after reporting Q4 net income and revenues, as both more than doubled from a year earlier to $81 million and $383 million, respectively. The company’s earnings per share for the fourth quarter of 2021 came in at $0.45, beating market consensus by $0.28.
In the fourth quarter of 2021, 14 hedge funds held long positions in Talos Energy Inc. (NYSE:TALO), with collective stakes amounting to approximately $40 million. D E Shaw held the leading position in the company, with 815,768 shares worth close to $8 million.
In addition to Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP), Talos Energy Inc. (NYSE:TALO) is an oil stock on the radar of institutional investors.
9. Viper Energy Partners LP (NASDAQ:VNOM)
Number of Hedge Fund Holders: 10
Based in Midland, Texas, Viper Energy Partners LP (NASDAQ:VNOM) owns and acquires oil and natural gas properties in North America. In Q4 2021, 10 hedge funds were bullish on Viper Energy Partners LP (NASDAQ:VNOM), with Cardinal Capital holding a leading stake in the company. The hedge fund owned 2.8 million shares of Viper Energy Partners LP (NASDAQ:VNOM), worth $60.4 million.
Insider ownership accounts for 0.30% of the total Viper Energy Partners LP (NASDAQ:VNOM) stockholders, and from March 1 to March 11, two large shareholders of the company, namely Holdings L.P. Blackstone III and Bx Guidon Topco Llc, sold 564,464 shares of the company collectively. Over the last 12 months, insider selling at Viper Energy Partners LP (NASDAQ:VNOM) amounted to approximately $55.5 million.
On February 22, Viper Energy Partners LP (NASDAQ:VNOM) declared a quarterly dividend of $0.47 per share, a 23.7% increase from its prior dividend of $0.38. The dividend was distributed on March 11, to shareholders of record on March 4. This payout represents approximately 70% of total cash available for distribution. The company also posted above consensus earnings and revenue for Q4 2021.
Piper Sandler analyst Mark Lear raised the price target on Viper Energy Partners LP (NASDAQ:VNOM) to $32 from $29 and kept an Overweight rating on the shares on March 10. The analyst thinks the market is not accurately discounting the duration risk of a higher price environment “given dwindling global spare capacity, the inability of shorter cycle production from filling any near-term supply gaps and the longer-term supply uncertainty”.
Here is what Bernzott Capital Advisors has to say about Viper Energy Partners LP (NASDAQ:VNOM) in its Q3 2021 investor letter:
“Viper Energy (VNOM): The combination of higher oil and natural gas prices, an accretive acquisition that enhances their Permian Basin footprint as well as an increase in their quarterly shareholder distribution by 28% drove relative stock performance during the quarter. The company remains well positioned to continue to grow free cash flow and distributions over time based on constructive supply/demand fundamentals in the energy patch coupled with their premiere Permian acreage royalty position.”
8. Callon Petroleum Company (NYSE:CPE)
Number of Hedge Fund Holders: 24
Callon Petroleum Company (NYSE:CPE) is an independent oil and natural gas company, with properties in the Permian Basin in West Texas. Elite hedge funds are buying Callon Petroleum Company (NYSE:CPE) stock. In Q4 2021, 24 hedge funds were long Callon Petroleum Company (NYSE:CPE), up from 20 funds in the prior quarter. Didric Cederholm’s Lion Point is the largest shareholder of the company, with 527,538 shares worth roughly $25 million.
Primexx Energy Partners and Blackstone Holdings III L.P. were the major insiders that sold 2.28 million shares of the company in total from March 1 to March 11, and the insider selling over the last 12 months amounted to roughly $44.75 million. 2.10% of the total shares of Callon Petroleum Company (NYSE:CPE) are owned by insiders.
Although the Q4 earnings missed estimates, Callon Petroleum Company (NYSE:CPE) expects to generate $500 million in free cash flow in 2022.
On March 8, Truist analyst Neal Dingmann upgraded Callon Petroleum Company (NYSE:CPE) to Buy from Hold with a price target of $100, up from $64. The company’s continued strong operations and the high commodity prices will enable Callon Petroleum Company (NYSE:CPE) to reach leverage of under 1.3-times by the end of 2022, the analyst told investors in a research note.
7. Centennial Resource Development, Inc. (NASDAQ:CDEV)
Number of Hedge Fund Holders: 28
Centennial Resource Development, Inc. (NASDAQ:CDEV) is a Colorado-based independent oil and natural gas company, focused on the development of crude oil and natural gas liquids reserves in the United States.
On February 23, Centennial Resource Development, Inc. (NASDAQ:CDEV) announced a $350 million stock repurchase program for two years. The program represents approximately 15% of the company’s current market capitalization. Centennial Resource Development, Inc. (NASDAQ:CDEV) traded 4.70% higher post-market, after announcing above consensus Q4 results.
The latest insider selling at Centennial Resource Development, Inc. (NASDAQ:CDEV) was declared on March 3. A total of 45.2 million shares were sold by three major insiders, namely REL US Centennial Holdings LLC, Riverstone Non-ECI USRPI AIV, L.P., and Silver Run Sponsor, LLC.
According to Piper Sandler analyst Mark Lear, U.S. exploration and production companies have outperformed the broader market year-to-date, but the equities do not reflect the longer term oil and gas supply uncertainty in the wake of the Ukraine invasion. Lear, on March 10, raised the price target on Centennial Resource Development, Inc. (NASDAQ:CDEV) to $10 from $9 and kept a Neutral rating on the shares.
Among the hedge funds tracked by Insider Monkey, 28 funds were bullish on Centennial Resource Development, Inc. (NASDAQ:CDEV) in Q4 2021, up from 19 funds in the quarter prior. Two Sigma Advisors held a prominent stake in Centennial Resource Development, Inc. (NASDAQ:CDEV), with 4.35 million shares worth $26 million.
6. California Resources Corporation (NYSE:CRC)
Number of Hedge Fund Holders: 29
Based in Santa Clarita, California Resources Corporation (NYSE:CRC) sells crude oil, natural gas, and natural gas liquids to marketers, California refineries, and other purchasers. California Resources Corporation (NYSE:CRC) on March 1 declared a $0.16 per share quarterly dividend, in line with previous. The dividend will be paid on March 16, to shareholders of record on March 7.
According to Insider Monkey’s data, California Resources Corporation (NYSE:CRC) insiders sold 907,379 shares from March 1 to March 11. A California-based global alternative investment manager, Ares Management LLC, is the most prominent insider who disposed of its shares, and the transactions were priced roughly between $42 and $45 per share.
On February 24, California Resources Corporation (NYSE:CRC)’s fourth quarter results were published, and the company reported an EPS of $2.13, above estimates by $0.10. Revenue over the period was $634 million, up 317.1% year-on-year, topping consensus by almost $90 million.
A total of 29 hedge funds were bullish on California Resources Corporation (NYSE:CRC) in Q4 2021, up from 25 funds in the quarter prior. The total stakes held at the end of December 2021 were roughly $731 million, compared to $755.3 million in the preceding quarter.
Hedge fund sentiment was largely positive around California Resources Corporation (NYSE:CRC) at the end of 2021, just like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP).
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Disclosure: None. Insiders and Executives are Selling These 10 Oil Stocks is originally published on Insider Monkey.
