Top-level insiders tend to have a good understanding of their companies’ operating activities. If they’re buying company shares, it’s often a sign that the outlook for the stock is attractive.
In this report, we are going to highlight some buying from a top-level insider at Avance Gas Holdings Ltd (AGAS:NO). Avance is a shipping company that is engaged in the transportation of liquefied petroleum gas (LPG). The company is one of the world's leading owners and operators of very large gas carriers (VLGCs) with a fleet of 14 ships. It is listed on the Oslo Stock Exchange and currently has a market capitalization of NOK 4.1 billion.
Avance Gas Holdings Ltd: Insider Buying
Our data shows that on June 24, Chairman Øystein Kalleklev picked up 20,000 AGAS shares at a price of NOK 51.57 per share. This cost the insider NOK 1.03 million (approx. USD $104,000) and increased his holding to 50,000 shares.
This trading activity is worth highlighting for several reasons. Firstly, Mr. Kalleklev has considerable experience in the industry. Previously, he served as CEO at FLEX LNG Management and CFO at Knutsen NYK Offshore Tankers. This means that he is likely to have a good understanding of his company’s prospects.
Secondly, our records show that the insider has made well-timed trades in the past. In November 2021, for example, he bought 30,000 shares at a price of NOK 35.64 per share. Since then, the stock has traded above NOK 60. It’s worth noting that Mr. Kalleklev was previously Managing Director of Umoe Invest and Partner of investment bank Clarksons Platou. So, he knows what he is doing when he buys stock.
Third, the insider has boosted the size of his holding by 67% with this trade. This suggests that he is very confident the stock is set to continue rising.
Strong Freight Rates
Avance Gas recently posted strong results for the first quarter of 2022.
For the period, the average time charter equivalent (TCE) rate was USD $37,608/day compared to $27,631/day for the fourth quarter 2021. This helped the company generate a net profit of USD $24.3 million compared to $7.5 million for the fourth quarter of 2021, or earnings per share of 32 cents compared to 10 cents for the fourth quarter. Net cash from operating activities amounted to USD $38.9 million versus $15.3 million in Q4 2021.
Looking ahead, the company said that in the short and medium term, it expects the positive market environment to continue. For the second quarter of 2022, it expects a TCE rate of between $35,000/day and $36,000/day on a discharge-to-discharge basis and between $32,000/day and $33,000/day on a load to discharge basis.
In light of these results, we see the insider buying here as a bullish indicator.