Insiders Give Vote of Confidence to Struggling Manufacturer, 2 Energy Companies

Moving on to Rice Energy Inc. (NYSE:RICE), President and Chief Operating Officer Toby Z. Rice purchased 7,500 shares on Monday for $13.30 each and currently holds 44,649 shares. His spouse also holds an ownership stake of 16,794 shares. One of Peter Lynch’s investing principles says: “Never bet on comeback while they’re playing Taps”. This principle suggests that it’s foolish to buy more shares of a company that is on the edge of failure and to anticipate further deteriorating fundamentals. Of course, Carl Icahn and other investors might not entirely agree with this principle, but the COO’s recent purchase might point to a rebound in the forthcoming future for the struggling independent natural gas and oil company. The company’s natural gas, oil and NGL sales amounted to $130.1 million for the third quarter, compared to $67.8 million reported last year. This increase is mainly attributable to increased drilling and completion activity, which was in turn offset by a decrease in realized prices. However, the company has entered into various financial commodity derivative contracts in order to reduce its risk exposure to the volatility of oil and natural gas prices.

23 hedge funds tracked by Insider Monkey had stakes in the company at the end of the third quarter, with them having stockpiled 22.00% of the company’s shares at that time. Ken Griffin’s Citadel Advisors LLC owned 11.36 million shares of Rice Energy Inc. (NYSE:RICE) at the end of September.

Finally, Tidewater Inc. (NYSE:TDW) is another company that has registered a relatively sizable inside purchase this week. Director Richard T. du Moulin reported purchasing 10,000 shares on Monday at $9.20 per share, 8,000 shares of which are owned by his children. After the recent purchase, the Director holds a direct ownership stake of 25,000 shares. The provider of offshore service vessels and marine support services to the offshore energy industry has had a disastrous year in terms of stock performance, with its shares declining by 70% year-to-date. The main driver of the company’s business is the level of its customers’ capital spending for offshore oil and natural gas exploration and production, which clearly explains the terrible stock performance. At the same time, Tidewater anticipates that its long-term utilization rates for its vessels will strongly correlate with the demand and price of crude oil, so the company’s financial figures may still disappoint its investors in the upcoming quarters. However, a potential decrease in the levels of supply and increase in demand for crude oil and natural gas will assist the company in achieving a much-awaited turnaround.

The number of hedge fund investors from our database invested in the company at the end of September stood at 16, up by three quarter-over-quarter. Renaissance Technologies was among the investment firms that added Tidewater Inc. (NYSE:TDW) to their portfolios during the third quarter, holding 102,000 shares of it on September 30.

Disclosure: None