Top-level insiders such as CEOs and Chairmen tend to have a good understanding of their companies’ operating activities. If they’re buying company stock, it’s often a signal that the outlook for the stock is attractive.
In this report, we are going to highlight some buying from a top-level insider at HF Sinclair Corp (DINO:US). HF Sinclair is a diversified energy company. Headquartered in Dallas, Texas, it manufactures and sells products such as gasoline, diesel fuel, jet fuel, renewable diesel, specialty lubricant products, specialty chemicals, and specialty and modified asphalt. The company is listed on the New York Stock Exchange and currently has a market capitalization of $11.2 billion.
HF Sinclair Corp: Insider Buying
Our data shows that on May 24, HF Sinclair’s Chairman Franklin Myers bought 10,700 DINO shares at a price of $46.27 per share. This trade cost the insider $495,089 and increased his holding to 94,915 shares.
This trade is worth highlighting for a couple of reasons. Firstly, it is large in size. The fact that the insider has spent nearly half a million dollars on stock, and boosted the size of his holding by 13%, suggests that he is confident the stock will move higher.
Secondly, Mr. Myers has made some well-timed purchases in the recent past. Last year, he added to his holding on several occasions when the stock was trading between $30 and $35. Since then, it has risen as high as $48, generating solid gains for the insider.
HF Sinclair has considerable momentum at the moment due to high energy prices.
In the first quarter of 2022, revenue came in at $7.5 billion, up 113% year on year. Meanwhile, income from operations was up 69% to $232.8 million. Net income, excluding special items, amounted to $175.6 million ($0.99 per diluted share) compared to a net loss of $85.3 million (-$0.53 per diluted share) for the first quarter of 2021.
On the back of this good performance, the group raised its quarterly dividend from $0.35 per share to $0.40 per share.
Looking ahead, management was optimistic in relation to the outlook.
“As we head into summer driving season, refining fundamentals are very favorable due to strong gasoline and diesel demand, coupled with low product inventories. We remain fully committed to our capital allocation strategy of returning $1 billion in cash to shareholders over the next twelve months,” said CEO Michael Jennings.
In light of these results, and the optimistic tone from the CEO, we see the insider buying as a bullish indicator.