It's a trend that's becoming alarming. The number of insider purchase records continues to dwindle. In fact, last week was probably the worst week this author has seen since the mortgage meltdown.
Cleary, the folks running public companies in the US are concerned about something, and based on the stock market's performance before, during, and after the last 17 government shutdowns, our guess is that corporate executives are worried about something bigger and badder.
We don't want to speculate, but the lack of activity feels like that eerie calm before a nasty storm.
Normally, there are at least a handful of established companies that iStock has to weed through for our weekly insider buying column. However, there was only one insider buy worth mentioning.
And that belongs to William Macaulay who is a director at Weatherford International, Ltd. (WFT). The director bought 78,000 shares of WFT on September 27, 2013 for a total of $1.19 million. Mr. Macaulay's recent purchase is particularly peculiar.
The director did nothing but sell millions of dollars of the Oil & Gas Equipment & Services company for the last two-years. The odd thing is he sold 78,000 shares on August 26, 2013 at $15.05. In a month and a day, Macaulay had a change of heart, paid $0.21 more than the August sell, and made his first open market buy in the past 24 months.
We can't help but wonder why the director made a 180, especially with earnings due to in about a month (November 5, 2013). Things that make you go hmmm.
It's also interesting to note that Chief Admin. Officer and Exec. VP, Dharmesh B. Mehta had a similar U-turn in sentiment, breaking a two-year selling streak when he bought 10,000 shares on September 16, 2013 at $14.97 per-share.
Oh, almost forgot, Switzerland-based, Weatherford provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells in over 100 countries, and has service and sales loc! ations in nearly all of the oil and natural gas producing regions in the world.
In the WFT's most recent 10-Q, management wrote, "We believe that 2013 has been and will continue to be a positive year for both our North American and international operations.
We expect steady improvements in North America with some gains, both top-line and margin.
Internationally, forecasts for Latin America show a very strong year and Europe/SSA/Russia and Asia Pacific are all expected to have solid growth and positive margin improvements.
MENA should regain its status as a positive contributor. We expect our artificial lift systems product line to have steady volume growth into 2013.
Pricing increases for artificial lift systems are expected to flatten in North America, but increase in the international markets."
Perhaps, things improved more than expected?
Overall: Weatherford International, Ltd. (WFT) is worth monitoring thanks to the sudden change in sentiment from at least two insiders. Although WFT trades below its 5-year average price-to-sales ratio and marginally higher than the price-to-book norm, iStock has the sense that Macaulay's and Mehta's purchases were not valuation based. They were sellers at lower multiples.
No, we have that eerie calm before the storm sense that something bigger and badder is coming. We'll probably find out on November 5th.
No comments:
Post a Comment