When insiders buy shares on the open market, their companies could enjoy bullish times ahead. Corporate insiders often have the inside track on their companies' prospects, and many of them get paid largely in stock options or restricted shares. Besides, insiders probably wouldn't risk plowing too much of their own money into their own company's stock -- reducing their portfolio's diversity and increasing its risk -- unless they thought the stock might rise.
With that in mind, I screened for companies where at least one insider made an open-market buy in the last 30 days. These 16 energy stocks made the list:
|
Security |
Net Number of Buys |
No. of Shares Bought |
Total Value |
Market Cap |
|---|---|---|---|---|
|
KiOR |
14 | 83,199,804 | $13,730,000 | $1,524 |
|
Overseas Shipholding Group |
4 | 129,661 | $3,400,000 | $808 |
|
ATP Oil & Gas |
5 | 143,169 | $1,000,000 | $801 |
|
Evolution Petroleum |
2 | 118,509 | $857,000 | $203 |
|
Chesapeake Energy |
5 | 59,409 | $412,000 | $19,222 |
|
NuStar Energy |
2 | 4,200 | $264,000 | $4,182 |
|
Abraxas Petroleum |
3 | 71,536 | $219,000 | $381 |
| Kodiak Oil & Gas | 2 | 26,450 | $157,000 | $1,145 |
| Ensco | 3 | 3,000 | $156,000 | $7,583 |
| Penn Virginia Resource Partners | 3 | 12,630 | $99,000 | $1,913 |
| Exterran Holdings | 2 | 6,008 | $98,000 | $1,260 |
| Dorchester Minerals | 1 | 3,000 | $76,000 | $830 |
| GMX Resources | 2 | 20,000 | $46,000 | $270 |
| W&T Offshore | 1 | 1,685 | $40,000 | $2,011 |
| Regency Energy Partners | 1 | 750 | $18,000 | $3,840 |
| Panhandle Oil and Gas | 2 | 499 | $15,000 | $275 |
Source: Capital IQ, a division of Standard & Poor's, as of July 5, 2011.
When it comes to the number and total value of insider open-market buys, more can be better; I've sorted this table accordingly. Insiders at KiOR made 14 open-market purchases worth a total of $13.7 million, while Panhandle Oil and Gas insiders spent just $15,000 on two open-market buys. Both are bullish signs, but the KiOR purchases look a lot more promising.
Foolish takeaway
Insider buying signals that someone who should be in the know is betting that the stock will rise. You can use this list of recent insider purchases as a starting point for further research -- or a good reason to make a contrarian play.
Are these insiders right? To help you find out, The Motley Fool recently introduced a free My Watchlist feature. You can get up-to-date news and analysis by adding companies to your Watchlist now.
