One energy stock has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:
- The stock is purchased by three or more insiders within one month.
- The stock is sold by no insiders in the month of intensive purchasing.
- At least two purchasers increase their holdings by more than 10%.
Arsenal Energy (AEYIF, Financial) is engaged in the exploration, development, and production of oil and natural gas in the Western Canadian Sedimentary basin in Canada and Williston basin in the United States.
(Source: Investor presentation)
Insider Buying During the Last 30 Days
Here is a table of Arsenal’s insider activity during the last 30 days.
| Name | Title | Trade Date | Shares Purchased | Prospectus | Current Ownership | Increase In Shares |
| Ron Forth | VP | June 30 | 2,139 | Yes | 170,450 shares | +1.3% |
| Paul Lawrence | CFO | July 2 | 2,000 | Yes | 53,568 shares | +3.9% |
| Bruce Mitchell | 10% Owner | June 11-July 9 | 226,500 | Yes & No | 2,272,809 shares | +11.1% |
| Gjoa Taylor | VP | July 2 | 2,000 | Yes | 15,195 shares | +15.2% |
There have been 232,639 shares purchased by insiders during the last 30 days. Most of these shares were purchased pursuant to a bought deal financing.
Insider Buying by Calendar Month
Here is a table of Arsenal’s insider activity by calendar month.
| Month | Insider buying / shares | Insider selling / shares |
| July 2014 | 107,800 | 0 |
| June 2014 | 124,839 | 0 |
| May 2014 | 172,700 | 12,100 |
| April 2014 | 5,000 | 0 |
| March 2014 | 8,200 | 5,000 |
| February 2014 | 0 | 0 |
| January 2014 | 25,600 | 0 |
| December 2013 | 15,000 | 0 |
| November 2013 | 0 | 5,000 |
| October 2013 | 3,600 | 0 |
| September 2013 | 0 | 0 |
| August 2013 | 0 | 0 |
| July 2013 | 20,150 | 0 |
| June 2013 | 9,900 | 0 |
| May 2013 | 59,800 | 0 |
| April 2013 | 37,450 | 0 |
| March 2013 | 9,150 | 0 |
| February 2013 | 29,850 | 0 |
| January 2013 | 45,962 | 0 |
(Note: The table doesn't include shares acquired or disposed pursuant to a purchase/ownership plan)
(Note: Arsenal had a 10 for one share consolidation on August 6, 2013. All the numbers are split adjusted)
There have been 675,001 shares purchased and there have been 22,100 shares sold by insiders since January 2013. The month of May 2014 has seen the most insider buying.
Financials
Arsenal reported the first-quarter financial results on May 6 with the following highlights:
| Revenue | C$19.2 million |
| Funds from operations | C$11.1 million |
| Net income | C$2.0 million |
| Cash | C$3.2 million |
| Debt | C$74.3 million |
| Production | 4,108 boe/d |
Arsenal closed a C$7.5 million private placement on July 3.
News
Arsenal’s production averaged approximately 4,700 boe/d in June.
Outlook
Arsenal’s 2014 guidance is as follows:
| Production | 4,400 boe/d |
| Funds from operations | C$50.0 million |
| CapEx | C$44.0 million |
(Source: Investor presentation)
Competition
Arsenal has a very low payout ratio compared to its peers.
(Source: Investor presentation)
Conclusion
There have been four different insiders buying Arsenal and there have not been any insiders selling Arsenal during the last 30 days. Two of these four insiders increased their holdings by more than 10%. Arsenal has an insider ownership of 28%.
(Source: Investor presentation)
The four insiders purchased their shares at prices ranging from $7.15 (C$7.62) to $8.78 (C$9.35). I believe Arsenal could be a good pick below $8.78 based on the intensive insider buying.
(Source: Investor presentation)
Disclosure: The author has no positions in any stocks mentioned.
