2iQ Insider Brief: Energy Transfer Partners (ETP: US), Humanwell Healthcare (600079: CH), Hoist Finance (HOFI: SS)

Robert Hable 17 September 2018

Energy Transfer Partners LP (ETP: US)

12-month performance: +19%
Insider activity: Bullish
Buying pattern: Large purchases from Chairman/CEO
Recent news: Merger of Energy Transfer Partners and Energy Transfer Equity

Energy Transfer Partners is a Master Limited Partnership that owns one of the most diversified portfolios of energy assets in the United States. Formed in April 2017 after the merger of Energy Transfer Partners and Sunoco Logistics Partners, the group is strategically positioned in all of the major US production basins and operates a portfolio of natural gas midstream, intrastate and interstate transportation and storage assets, as well as crude oil, natural gas liquids and refined product transportation assets. The company currently has a market capitalization of $26.2 billion.

Shares in Energy Transfer Partners have performed well over the past year, rising 19%. Recently, in early August, the stock spiked sharply on news that the company was merging with a subsidiary of Energy Transfer Equity (ETE). The deal has Energy Transfer Equity offering 1.28 ETE shares for each ETP share with Energy Transfer Equity stating that the merger will simplify its overall structure, add transparency and boost distributable cash flow. If the deal is approved it will close in the fourth quarter of 2018. Is it too late to profit from this deal now?

 

Energy Transfer Partners (ETP:US)

 

Source: 2iQ Research

Possibly not, looking at recent insider transaction activity. In the last week, we have seen Energy Transfer Partners Chairman and CEO Kelcy Lee Warren purchase two million shares in the company for a total consideration of $44.8 million. The American billionaire businessman, who is also Chairman of Energy Transfer Equity and its largest shareholder, clearly sees further profit potential from the deal. As such, we believe that there could be an interesting profit opportunity here.

Humanwell Healthcare (600079: CH)

12-month performance: -34%
Insider activity: Bullish
Buying pattern: Large purchase from Chairman and CEO
Recent news: Good H1 results

Headquartered in China, Humanwell Healthcare is a fully integrated healthcare solutions provider that serves customers in over 10 countries. The group is a market leader in anesthetics/analgesics, fertility regulation drugs, and Uyghur medicine in Asia and also specializes in central nerve system drugs, biological products, medical devices and diagnostics. The company currently has a market capitalization of CNY 16.4 billion.

Despite reporting a first half net profit increase of 34% in August, shares in Humanwell have performed poorly over the last year, falling by more than one third. The stock has been dragged down along with China’s SSE Composite Index, which has declined approximately 20% year to date. Could this fall have presented a buying opportunity?

 

Humanwell Healthcare (6000979:CH)

 

Source: 2iQ Research

Analysis of recent insider activity here reveals a trading pattern that looks quite bullish. Since the start of September, we have seen two purchases from Chairman Xue Wang, for a total consideration of just under USD $700,000, as well as three purchases from CEO Jie Li, who has spent approximately USD $608,000 on company stock. Clearly, these key insiders see value at the current share price. As such, the shares could be worth monitoring for a turnaround. 

Hoist Finance AB (HOFI: SS)

12-month performance: -7%
Insider activity: Bullish
Buying pattern: Purchases from CEO and COO
Recent news: Placing to finance future investments

Hoist Finance is a Swedish debt restructuring company that serves international banks and financial institutions. It specializes in handling non-performing loans, and helps individuals become debt-free by providing long-term, sustainable payment plans. Hoist also offers retail deposits in Sweden and Germany.

Shares in Hoist Finance have performed poorly in 2018. Back in early January the stock was trading close to SEK 100, however, since then it has fallen as low as SEK 62, as concerns over political turmoil in Italy and the possibility of a Eurozone debt crisis have unnerved investors. The fact that CFO Pontus Sardal left the company in March would have not helped investor sentiment either. However, the stock has rallied nearly 30% since early July as sentiment towards the group has improved – can this upward momentum continue?

 

Hoist Finance AB

 

Source: 2iQ Research

Looking at recent insider transaction activity, key directors appear to be bullish on the outlook for the company. This week, we have seen purchases from CEO Klaus Nysteen, COO Bjoern Hoffmeyer and Chief Level Officer Ulf Eggefors. CEO Nysteen’s purchase is of particular note, as not only was it a sizeable purchase worth USD $242,086, but it also nearly doubled his holding in the company. Given this pattern of director buying, we think the stock could have the potential to keep rising.

 

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