Yahoo Finance Oil & gas CEOs are buying millions in company stock: report
Insiders have bought $28 million worth of stock in open-market purchases in past 6 months
Top executives at Canadian mid-cap oil and gas companies snapped up millions worth of their firms' shares as volatility gripped energy stocks in recent weeks, according to a report by Raymond James.
Calgary-based analyst Jeremy McCrea says insider buying over the past six months represents "one of the largest purchasing periods we can remember," with insiders buying $28 million worth of stock in open-market purchases.
"There can be many reasons why insiders sell, but there is only one reason why insiders buy," McCrea wrote in a note to clients on Wednesday. "This encompasses confidence in management, confidence in go-forward profitability and ultimately, reassurance that there are no 'skeletons in the closet.'"
According to the report, Tourmaline Oil (TOU.TO) CEO Mike Rose made the largest recent purchase in the mid-cap energy sector, buying $5.3 million worth of stock at an average price of $63 per share. The stock has since fallen into the $55 per share range.
"Investors have the rare ability to come in below the CEO," McCrea wrote.
Rose spoke to investors on Wednesday at the 2023 BMO & CAPP Energy Symposium in Toronto.
"Fossil fuels are not going away. We're not shrinking," he told the audience. "I don't think there is much doubt that there is a supply reckoning coming for both oil and gas."
Raymond James says Baytex Energy's (BTE.TO) recently appointed CEO Eric Greager bought $2.5 million worth of stock in the past six months. McCrea says the purchase shows confidence in the company's $3.4 billion deal to buy Texas-based Ranger Oil, announced earlier this year. The report also shows Whitecap Resources' (WCP.TO) CEO purchasing $1.1 million worth of shares, and Kelt Exploration's (KEL.TO) CEO buying $0.9 million worth of shares.
"Despite an already large share ownership for each of these CEOs, the recent buying should help give confidence on the underlying business and direction going forward," McCrea wrote. "Importantly as well, 55 per cent of CEOs in the mid-cap sector added to their positions in open-market purchases, highlighting the overall strength in the sector."
Raymond James says Tourmaline saw the most overall buying from insiders in the last six months, with $6 million in total purchases, followed by Peyto Exploration & Development (PEY.TO) at $5.6 million, and Baytex at $3.3 million.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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