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We pay special attention to insider purchases by independent directors that have an investment background and our top insider purchase this week fit that bill. Moreover it happens to an insider purchase in an oil and gas pipeline company with a particular focus on the Permian basin, which accounts for 75% of the 7.33 million barrels it transports per day. I was reviewing the financial statements of oil exploration and production company Continental Resources (CLR) last week after Harold Hamm offered to take the company private for $70/share in cash and was struck by how much Continental has increased its capital expenses. After holding the line for several quarters on not increasing production, the frackers have finally given in and have increased their capital spending.
This increased production by oil companies translates to higher volumes transported and stored by pipeline companies like Plains All American Pipeline (PAA). This is the first insider purchase of PAA by Director Kevin S. McCarthy since he joined the board in 2020. Given below is a brief overview of Mr. McCarthy’s background from the PAA website,
Mr. McCarthy has served as a director of PAA GP Holdings LLC since October 2020. He is currently Vice Chairman at Kayne Anderson, where he co-founded and oversaw the firm’s energy infrastructure securities activities, and served as CEO and Chairman of the Board of Directors for Kayne Anderson’s closed-end funds from 2004 through July 2019. Prior to joining Kayne Anderson in 2004, Mr. McCarthy was global head of energy investment banking at UBS Securities LLC and held similar positions at PaineWebber Incorporated and Dean Witter Reynolds. Mr. McCarthy serves as a director of Altus Midstream Company and Whiting Petroleum Corporation, and previously served as a director of Range Resources Corporation, ONEOK, Inc., Emerge Energy Services LP and K-Sea Transportation Partners L.P. Mr. McCarthy earned a BA in economics and geology from Amherst College and an MBA in Finance from the Wharton School at the University of Pennsylvania.
Plains All American Pipeline sports a yield of 8.77%, in keeping with what you would expect from a master limited partnership (MLP). With contracts that were struck during the depths of the energy crisis two years ago being renegotiated, the pipelines benefit from a combination of higher prices and higher volumes. We saw PAA increase its dividend this quarter to an annual rate of $0.87 per unit and I would not be surprised to see it trending higher over time to its pre-crisis annual level of $1.44 per unit. If betting on individual pipeline companies is not your cup of tea and if you would rather not get K-1 forms associated with owning MLP (even in retirement accounts), then an instrument like the Alerian MLP ETF (AMLP) would be worth considering. It sports an 8.4% dividend yield, had $5.27 billion in assets and an expense ratio of 0.87%.
Welcome to edition 625 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $67.87 million of stock compared to $256.48 million in the week prior. Selling increased to $554.42 million compared to $456.86 million in the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 8.17. In other words, insiders sold more than 8 times as much stock as they purchased. The Sell/Buy ratio this week was favorable compared to the prior week when the ratio stood at 1.78.
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Notable Insider Buys:
1. Plains All American Pipeline, L.P. (PAA): $9.92
Director Kevin S. McCarthy acquired 200,000 shares of this crude oil and natural gas liquids company, paying $9.81 per share for a total amount of $1.96 million.
You can view the list of recent insider transactions for Plains All American Pipeline, L.P. here.
| P/E: 44.48 | Forward P/E: 8 | Industry P/E: 10.25 |
| P/S: 0.15 | Price/Book: 0.9 | EV/EBITDA: 10.74 |
| Market Cap: $6.97B | Avg. Daily Volume: 5,313,904 | 52 Week Range: $8.64 – $12.1 |
2. Enviva Inc. (EVA): $60.53
Shares of this utility-grade wood pellets producer were acquired by 3 insiders:
- Chairman and CEO John K. Keppler acquired 16,422 shares, paying $60.57 per share for a total amount of $994,650. Mr. Keppler increased his stake by 2.34% to 717,454 shares with this purchase.
- President Thomas Meth acquired 8,600 shares, paying $58.78 per share for a total amount of $505,508. Mr. Meth increased his stake by 2.06% to 426,255 shares with this purchase.
- Exec VP & CFO Shai Even acquired 4,300 shares, paying $58.85 per share for a total amount of $253,055. Mr. Even increased his stake by 1.21% to 359,130 shares with this purchase.
You can view the list of recent insider transactions for Enviva Inc. here.
| P/E: N/A | Forward P/E: 56.57 | Industry P/E: 10.25 |
| P/S: 3.9 | Price/Book: 7.34 | EV/EBITDA: 372.68 |
| Market Cap: $4.03B | Avg. Daily Volume: 454,729 | 52 Week Range: $51.2 – $91.06 |
3. Blackstone Mortgage Trust, Inc. (BXMT): $29.03
Shares of this real estate finance company were acquired by 3 insiders:
- Director Michael B. Nash acquired 40,000 shares, paying $26.14 per share for a total amount of $1.05 million. Mr. Nash increased his stake by 11.10% to 400,455 shares with this purchase.
- Director Jonathan Lee Pollack acquired 13,500 shares, paying $26.16 per share for a total amount of $353,140. Mr. Pollack increased his stake by 13.34% to 114,683 shares with this purchase.
- Director Leonard W. Cotton acquired 5,000 shares, paying $27.78 per share for a total amount of $138,922. Mr. Cotton increased his stake by 11.64% to 47,955 shares with this purchase.
You can view the list of recent insider transactions for Blackstone Mortgage Trust, Inc. here.
| P/E: 10.42 | Forward P/E: 10.83 | Industry P/E: 12.01 |
| P/S: 8.52 | Price/Book: 1.06 | EV/EBITDA: N/A |
| Market Cap: $4.94B | Avg. Daily Volume: 1,526,659 | 52 Week Range: $25.99 – $34.04 |
4. OPKO Health, Inc. (OPK): $2.64
Shares of this medical devices and drug development company were acquired by 2 insiders:
- Chief Innovation Officer Gary J. Nabel acquired 240,000 shares, paying $2.49 per share for a total amount of $597,393. These shares were purchased indirectly by a trust.
- CEO & Chairman Phillip Frost M.D. acquired 200,000 shares, paying $2.39 per share for a total amount of $478,857. These shares were purchased indirectly by Frost Gamma Investments Trust.
You can view the list of recent insider transactions for OPKO Health, Inc. here.
| P/E: N/A | Forward P/E: -26.4 | Industry P/E: 22.4 |
| P/S: 1.15 | Price/Book: 1.11 | EV/EBITDA: -56.92 |
| Market Cap: $1.8B | Avg. Daily Volume: 4,878,050 | 52 Week Range: $2.17 – $5.25 |
5. Federal Realty Investment Trust (FRT): $99.53
Director David W. Faeder acquired 10,565 shares of this retail REIT, paying $95.84 per share for a total amount of $1.01 million. Mr. Faeder increased his stake by 79.36% to 23,878 shares with this purchase.
You can view the list of recent insider transactions for Federal Realty Investment Trust here.
| P/E: 30.29 | Forward P/E: 38.43 | Industry P/E: 27.69 |
| P/S: 8.03 | Price/Book: 3.2 | EV/EBITDA: 19.77 |
| Market Cap: $7.97B | Avg. Daily Volume: 511,804 | 52 Week Range: $92.02 – $140.51 |
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Target Corporation (TGT): $150.42
Executive Officer John J. Mulligan sold 45,490 shares of Target for $139.98, generating $6.37 million from the sale.
You can view the list of recent insider transactions for Target Corporation here.
| P/E: 12.44 | Forward P/E: 12.19 | Industry P/E: 13.55 |
| P/S: 0.65 | Price/Book: 6.47 | EV/EBITDA: 8.05 |
| Market Cap: $69.75B | Avg. Daily Volume: 6,321,958 | 52 Week Range: $138.58 – $268.98 |
2. Cadence Design Systems, Inc. (CDNS): $157.62
Director Lip-Bu Tan sold 40,000 shares of this software, hardware, services, and reusable integrated circuit (IC) design provider for $148.70, generating $5.95 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Cadence Design Systems, Inc. here.
| P/E: 58.84 | Forward P/E: 35.58 | Industry P/E: 49.43 |
| P/S: 13.78 | Price/Book: 15.75 | EV/EBITDA: 38.74 |
| Market Cap: $43.47B | Avg. Daily Volume: 1,635,859 | 52 Week Range: $132.32 – $192.7 |
3. Synopsys, Inc. (SNPS): $317.47
CFO Trac Pham sold 18,393 shares of this electronic design automation software products provider for $307.03, generating $5.65 million from the sale.
You can view the list of recent insider transactions for Synopsys, Inc. here.
| P/E: 49.47 | Forward P/E: 32.49 | Industry P/E: 49.43 |
| P/S: 10.2 | Price/Book: 8.73 | EV/EBITDA: 34.53 |
| Market Cap: $48.56B | Avg. Daily Volume: 1,005,735 | 52 Week Range: $255.02 – $377.6 |
4. Nucor Corporation (NUE): $111.06
President and CEO Leon J. Topalian sold 48,768 shares of this steel and steel products company for $112.61, generating $5.49 million from the sale. 28,768 of these shares were sold as a result of exercising options immediately prior to the sale.
You can view the list of recent insider transactions for Nucor Corporation here.
| P/E: 3.99 | Forward P/E: 8.98 | Industry P/E: 6.15 |
| P/S: 0.74 | Price/Book: 1.94 | EV/EBITDA: 2.84 |
| Market Cap: $29.55B | Avg. Daily Volume: 3,036,296 | 52 Week Range: $87.71 – $187.9 |
5. RPC, Inc. (RES): $6.88
Director Gary W. Rollins sold 645,223 shares of this oilfield services and equipment provider for $7.39, generating $4.77 million from the sale. These shares were sold indirectly through RFT Investment Company.
You can view the list of recent insider transactions for RPC, Inc. here.
| P/E: 46.17 | Forward P/E: 10.92 | Industry P/E: N/A |
| P/S: 1.54 | Price/Book: 2.23 | EV/EBITDA: 13.97 |
| Market Cap: $1.49B | Avg. Daily Volume: 1,757,358 | 52 Week Range: $3.33 – $12.91 |
You can view the full list of sales from this Insider Sales page.
The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.
Disclaimer: I hold a long position in AMLP. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.
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