Insider Buying

2iQ Insider Brief: Ophir Energy (OPHR:LN) Bilia AB (BILIA:SS) Bausch Health Companies (BHC:US)

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Ophir Energy (OPHR: LN) 

12-month performance: -49%
Insider activity: Bullish
Buying pattern: Multiple director purchases including Acting CEO and Chairman
Recent news: Key asset written down

Founded in 2004, Ophir Energy is an upstream oil and gas exploration and production company focused on Asia and Africa. The group’s principal activity is the development of offshore and deepwater oil and gas exploration assets. In Asia, the group has assets in Thailand, Indonesia, Malaysia and Myanmar and in Africa, it has assets in Equatorial Guinea, Gabon, Cote d’Ivoire, Tanzania and Kenya. Listed on the London Stock Exchange, the company currently has a market capitalisation of £265 million.

Shares in Ophir Energy have performed poorly over the last 12 months, declining nearly 50%. This is a particularly poor performance when you consider that many oil stocks have risen significantly over that time horizon due to higher oil prices. In Ophir’s case, the share price fall can be attributed to the fact that the company has failed to find a partner to finance the development of its Fortuna LNG gas field, off the coast of Equatorial Guinea. In its recent half-year results, the group announced that it was writing down the value of this project by $310 million, and also advised that it would be cutting jobs in London and moving its headquarters to Asia to lower costs. Clearly, the company is going through a tough period at present. Yet, after a 50% share price fall in the last year, could the shares offer turnaround potential?


Source: 2iQ Research

Analysis of insider transaction activity here actually reveals a bullish trading pattern. In the last week, we have seen five separate directors purchase stock, including acting CEO Alan Booth and Chairman William Schrader. These purchases suggest that key insiders see value in the stock at the current share price. As a result, we believe Ophir Energy is worth keeping a close eye on going forward.

Bilia AB (BILIA: SS)

12-month performance: -16%
Insider activity: Bullish
Buying pattern: Multiple director purchases including Chairman and subsidiary CEOs
Recent news: Solid Q2 results

Bilia AB is one of Europe’s largest car dealership chains. The group is engaged in the sale and servicing of passenger cars and transport vehicles and also offers supplementary services such as financing and insurance. It currently has 130 facilities across Sweden, Norway, Germany, Luxembourg and Belgium as well as online auction sites in Sweden and in Norway. The stock is listed on the Nasdaq Stockholm Exchange.

In late July, Bilia reported solid second-quarter results. Net turnover for the period came in at SEK 8,329 million, an increase of 16% and the group reported its highest ever operational earnings for a quarter at SEK 299 million. The increase in profit was attributable to high growth and strong profit in the service business. Yet, despite this impressive performance, Bilia shares are no higher than they were three months ago, after the stock recently pulled back by around 10% in late August. Could this correction have provided an attractive entry point?

BILIA-SSSource: 2iQ Research

Key insiders appear to think so, looking at recent insider transaction activity. Since the stock has pulled back in the last few weeks, five separate directors have purchased stock in the company including Chairman Mats Qviberg, who is one of Sweden’s most prominent financiers, Deputy Chairman Jan Pettersson, and subsidiary CEOs Frode Hebnes and Mathias Nilsson. Board member Anna Engebretsen also made a large purchase worth USD $1.2 million. Given this level of insider activity, we think Bilia AB shares look interesting right now.

Bausch Health Companies (BHC: US)

12-month performance: +73%
Insider activity: Bullish
Buying pattern: Multiple director purchases including Chairman/CEO and CFO
Recent news: Company name change

Bausch Health Companies Inc, formerly known as Valeant Pharmaceuticals International Inc, is a Canadian healthcare company that manufactures and markets a broad range of branded and generic pharmaceuticals, over-the-counter products and medical devices. The group has a diversified portfolio of products, with a core focus in the areas of eye health, dermatology and gastrointestinal diseases. Every day, the company’s products are used by up to 150 million people across the world. The stock is listed in both the US and in Canada.

Shares in Bausch Health have performed well over the last year, rising over 70%. After a significant share price fall between 2015 and early 2017, the company appears to be regaining investor confidence after beating analysts’ first-quarter profit estimates and raising its full-year guidance, cutting its debt and settling a number of lawsuits against the group. Can the upward share price momentum continue?

BHC-USSource: 2iQ Research

Insider transaction activity here looks positive. In the last week, we have seen buying activity from CFO Paul Herendeen and CEO and Chairman Joseph Papa who bought 10,000 and 30,000 shares respectively, as well as from independent director Richard De Schutter, who bought USD $3.0 million worth of stock. As a result, we think the stock could have the potential for further gains.

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