Tracking insider purchases can provide an investor with great ideas, just like keeping an eye on hedge fund moves. This is why, in this article, I will look into two companies in the energy segment that have seen their insiders buy more than $100,000 in their stock over the past week.
Noble Corporation (NYSE:NE) is a $7.59 billion market cap offshore drilling contractor for the oil and gas industry. Its stock trades at only 8.5 times the company’s earnings, compared to an industry average P/E of 11.10, and pays a 5.02% dividend yield, while the business boasts above average margins and returns. Therefore, one can understand why Noble Corporation (NYSE:NE) saw intense insider activity over the past few days.
On May 13, Mary Ricciardello, Board Director, acquired 280 shares of the company for prices ranging from $30.50 to $30.53 per share. However, the most relevant purchases took place on the following day. David W. Williams, Chairman, President and CEO, purchased 10,000 shares for $30.64 each. After spending more than $300,000 for Noble Corporation (NYSE:NE) stock, the insider owns 380,282 shares of Noble Corp. Furthermore, on that same date, James A. Maclennan, Sr. Vice President, CFO and Controller, spent more than $125,000 in stock, procuring 4,075 shares of the company. Mr. Maclennan now owns 57,842 Common Shares.
Moreover, it is not only insiders and analysts that are betting on this stock. Major hedge funds, including Jeffrey Tannenbaum‘s Fir Tree and Frank Brosens´ Taconic Capital have recently started positions in Noble Corporation (NYSE:NE) (over Q4 2013). In its last 13F filing, Fir Tree, the company’s largest hedge fund shareholder, declared to own 16.9 million shares of the company, up 24% in relation to the previous quarter. This holding is valued at more than $550 million, and is the most valuable in the fund’s portfolio, accounting for more than 6% of its total value.
The second case I would like to refer to is that of Usa Compression Partners LP (NYSE:USAC), an oil and gas midstream company engaged in the compression services business, with a market cap barely shy of $1 billion. On May 14, Eric D. Long, Chief Executive Officer, President and Director, bought 10,000 shares of Common Stock for $25.59 per share, for a grand total of more than $250,000, and allocated them at diverse indirect holdings. Following these transactions, Mr. Long beneficially owns 43,797 shares of Usa Compression Partners LP (NYSE:USAC).
Once again, above average margins and a 7.92% dividend yield make of this stock an attractive investment option. And not only Mr. Long seems to think so. With Andrew R. Midler, Russell Lucas and Jim Simons, amongst Usa Compression Partners LP (NYSE:USAC)’s shareholders, this stock certainly looks appealing.
Disclosure: Javier Hasse holds no position in any stocks mentioned.