- (0:20) - Is It Time To Invest Into E&P Stocks?
- (2:15) - The Events That Let To Todays Current E&P Enviroment
- (12:30) - Insider Cluster Buys: Where Are The Insiders Buying?
- (24:20) - Large Cap E&P Stocks: FANG, PXD, EOG, APA
- (29:00) - Takeways On The Insider Buying: MGY, BRY, MTDR, PE, ECA
Welcome to Episode #159 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is going solo to discuss the oil plunge and the energy stocks.
With the energy stocks down, in some cases, more than 50%, some insiders have rushed to buy the beaten down shares.
Where should you be looking for energy deals?
The most obvious place would be in the exploration and production companies, the “E&Ps.” These are the most sensitive to the move in crude prices.
They’ve been sold off, so they’re likely to be the first to recover.
Where Can You Find the Insider Buys?
1. Anyone can find the insider transactions on sec.gov.
2. Put in the ticker you are interested in in the company information box.
3. Then click on the “insider transactions” link.
4. It will give you a list of all the transactions, including the sells, awards, gifts and purchases.
But Tracey has been running screens to find the best insider buys. Over the last few months some of the largest insider buys she has ever seen have occurred in the energy stocks.
Are the Insiders Buying E&P Stocks?
1. Diamondback Energy FANG is one of the largest players in the Permian Basin. Shares are down over 30% year-to-date. But it hasn’t seen any insider buying over the prior 2 months.
2. Pioneer Natural Resources PXD is also one of the other big Permian players. Shares are down “just” 22.6% but are at new 52-week lows. The insiders have been on the sidelines there too.
3. Berry Petroleum BRY is headquartered in California and focuses on the Western states. Two insiders bought shares in December, which have now fallen 32% year-to-date. It’s trading with a forward P/E of just 7 and is paying a dividend currently yielding 4.6%.
4. Magnolia Oil & Gas MGY saw the CEO and the General Counsel both buy shares in Dec 2018 even though shares are only down 13% year-to-date. This company is “new” in 2018 so there isn’t much share history though.
5. Parsley Energy PE drills in the Delaware and Midland Basins of the Permian. Three insiders bought shares in late November through early December. Shares have continued to sink, though, and are now down 47% year-to-date. It trades with a forward P/E of only 9.9.
At some of the E&Ps, more than a dozen insiders have stepped in to buy in the last 2 months.
This sends a powerful signal about the shares.
Which E&Ps have seen the most buying? And what else should you know about the big insider cluster buys in the energy stocks?
Tune into this week’s podcast to find out.
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