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Monica Wolfe
Monica Wolfe
Articles (757) 

Insiders Make Buys as Key Energy Struggles

May 02, 2013 | About:

This week Key Energy Services (KEG) reported two significant insider transactions. Chairman, CEO and President Richard Alario and Director Ralph Michael, III both made large buys into the company.

CEO Richard Alario made the largest buy, adding a total of 50,000 shares to his stake. These shares traded at an average price of $5.96 for a transaction amount of $298,000. Since this buy the share prices are up 1.85%.

Director Ralph Michael added 10,000 shares of KEG stock at an average price of $5.95. This cost him a total of $59,500. Since his most recent buy share prices are up 2.02%.

Key Energy, formerly known as National Environmental Group, provides a range of products and services to the natural gas and oil industry. Key Energy provides well services to oil companies, foreign national oil companies and independent oil and natural gas production companies. Some of these services include rig-based well maintenance, workover, well completion and re-completion services, fluid management services, pressure pumping services, fishing and rental services and ancillary oilfield services.

The company has been struggling recently, as most recently noted in their first quarter results. Key Energy’s first quarter revenue for 2012 was at $428.4 million as compared to $466.5 million in the last quarter of 2012. The company also had a one-time retirement pay of $2.2 million that went to the former Senior VP and CFO Trey Whichard, III.

The net loss for Key Energy in the first quarter of 2013 was $274,000.

1367530447233.pngKEG data by GuruFocus.com

What’s good about Key Energy?

· The P/B ratio is close to a 3-year low of 0.71.

· The P/S ratio is nearing a 3-year low of 0.44.

· The price of Key Energy is close to a 3-year low of $5.87.

Potential problems with Key Energy:

· The company has been in an operating loss for the past three years.

· Also during the past three years, the company has issued $314.322 million of debt.

· The gross margin has been in a long-term decline. The average rate of decline is -3.2% per year.

Despite all of the negatives, Chuck Royce upped his stake in KEG by 8.81% as of March 31, 2013. Royce now holds on to shares of Key Energy. Five other gurus also hold stake in KEG. To see those gurus and the shares they hold, click here.

With its shares up 8.2%, Key Energy trades at $6.07.

Rating: 3.3/5 (4 votes)


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