Insider Buying Heats Up in Energy Sector
By TIM MELVIN Follow | DEC 17, 2015 | 2:00 PM EST | 2
When I look at a beaten-up sector, one of the key tells that things may be near a turnaround is insider buying. I may not be an expert on a given industry, but the people running the companies in the space should have some deeper level of knowledge than I possess.
We are finally starting to see some insider buying in the energy sector after something of a lull in 2015. I have proven pretty definitively that I have no sense of timing when it comes to the oil market, as I have been long and wrong for a little over a year now. One of the reasons I had held off adding to my positions was the fact that insiders simply were not very active on the buy side......
......The biggest MLP buy was in shares of Energy Transfer Equity (ETE). Co-founder Kelcy Warren spent over $41 million to purchase 2.485 million shares. Energy Transfer, as general partner of Energy Transfer Partners (ETP), Sunoco LP (SUN) and Sunoco Logistics LP (SXL), owns oil and natural gas pipelines and storage facilities. It sells natural gas to utilities, independent power plants, local distribution companies and industrial end-users. Energy Transfer is in the process of trying to acquire Williams Companies (WMB). The shares have been hit hard in the current selloff and are down 52% in 2105. If successful, it will become the world's largest energy infrastructure company. (Energy Transfer Partners is part of TheStreet's Action Alerts PLUS portfolio.)
Warren is not the only one buying the stock. President John McReynolds bought 84,667 shares of Energy Transfer Equity this month, CFO Jamie Welch bought 50,000 shares and Director Rick Turner bought 5,000 shares. At this price, the shares are yielding 8.7%, so you will have a decent cash flow if you decide to invest alongside the billionaire pipeline operator and his executives......"