One of the most bullish insider transaction patterns is ‘cluster buying.’ This is where three or more insiders have purchased company stock within a short period of time.
In this report, we are going to highlight recent cluster buying at Crescent Energy Co (CRGY:US). Crescent Energy is an independent US energy company that has a portfolio of assets in key proven basins across the lower 48 states. The company, which was formed by the merger of Contango and Independence Energy, is managed by KKR’s Energy Real Assets Team. It is listed on the New York Stock Exchange and currently has a market cap of $2.93 billion.
Insider buying at Crescent Energy
Our data shows that between August 12 and August 16, six insiders at Crescent Energy bought company stock. Among those buying shares were:
- CEO David Rockecharlie (31,250 shares @ $15.78 per share)
- CFO Brandi Kendall (6,000 shares @ $15.91 per share)
- Independent Director Karen Simon (35,000 shares @ $16.20 per share)
Combined, the six insiders invested around $1.3 million in stock.
The insiders listed above are all likely to have a good understanding of Crescent’s investment potential.
Mr. Rockecharlie joined KKR in 2011 and is currently Head of KKR’s Energy Real Assets business and Chairman of KKR’s Energy Investment Committee. Prior to joining KKR, he was co-founder and co-CEO of RPM Energy, LLC, a privately-owned oil and gas exploration and development company. Earlier in his career, Mr. Rockecharlie served as co-head of Jefferies & Company’s Energy Investment Banking Group.
Ms. Kendall joined KKR in 2013 and is responsible for a broad range of portfolio management activities for its Energy Real Assets team. Prior to joining KKR, she served as Director, Finance and Planning at Marlin Midstream and Finance Associate at NFR Energy. Ms. Kendall began her career in the energy investment banking industry, having held positions at JP Morgan and Tudor, Pickering, Holt & Co.
Ms. Simon previously served as Vice Chairman, Investment Banking, at JPMorgan. Over her 36 year banking career, she held a number of leadership positions, including Global Co-Head of Financial Sponsor Coverage and Head of EMEA Oil & Gas coverage.
Given their backgrounds, it’s fair to assume that these insiders know what they are doing here.
Surge in revenues
Crescent Energy recently posted strong results for the second quarter of 2022.
For the period, total revenue was $908.4 million versus $330.1 million a year earlier. Meanwhile, net income was $281.9 million compared to a loss of $272.9 million in Q2 2021.
During the quarter, the company produced 64 MBbl/d of oil, a 45% increase over the first quarter, with oil comprising 45% of total second quarter volumes on an equivalent basis.
“Through mid-year, we continue to perform incredibly well across the business and execute our business plan to add long-term value for our shareholders. We are seeing solid early-time results from our new assets in the Uinta, which are contributing significantly to our near 100% quarter-over-quarter increase in cash flow. Although industry-wide inflation and service availability are creating headwinds, our people continue to find ways to mitigate these pressures, while generating significant returns on invested capital,” commented Mr. Rockecharlie.
Looking ahead, the company said that it expects to generate “significant” levered free cash flow for the remainder of 2022. It plans to use this free cash flow to fund its dividend and further strengthen the balance sheet. It also noted that as certain hedges connected to acquisitions are rolled off, it will more fully participate in market pricing.
In light of these strong results, we see the insider buying here as a bullish indicator.