Corporate insiders know their companies more intimately than anyone else. They also have access to real time information that outsiders are unlikely to be aware of. If they’re buying stock, it is generally a positive development.
Here, we are going to highlight insider buying at Vistra Corp (VST:US). Vistra Corp is an American power generation company and electricity retailer that provides electricity and natural gas to 4.3 million clients in the commercial, industrial, and residential sectors, covering 20 states in the US and parts of Canada. The company generates its power through natural gas, nuclear, and solar, and also through battery energy storage facilities. It’s listed on the New York Stock Exchange and currently has a market capitalization of $9.8 billion.
Vistra Corp: Insider Buying
Our insider transaction data shows that between June 13 and June 17, two insiders at Vistra Corp bought stock. Those who bought shares were:
- President/CFO James Burke (50,000 shares @ $23.01per share)
- Chairman Scott Helm (30,000 shares at $23.77 per share)
- Board Member Brian Ferraioli (8050 shares at $22.37 per share)
In total, the two insiders spent just over $2 million on stock.
Wealth of Experience in the Energy Sector
The recent insider buying at Vistra Corp attracted our attention for two main reasons.
Firstly, both insiders know the energy industry incredibly well. Mr. Burke was COO at Vistra Corp for four years before moving into the CFO role and he was CEO of TXU Energy, a subsidiary of Vistra, for 11 years. Prior to this, he was COO of Gexa Energy.
Mr. Helm has a financial background, having been CFO of Orion Power Holdings, and also has investment expertise as he worked in both the Fixed Income and Investment Banking departments at Goldman Sachs. He was a Founding Partner of Energy Capital Partners, a private equity business that specializes in making investments into North American Energy Infrastructure. Mr. Helm has been on the board at Vistra Corp for around five years and in August he is taking on the role of CEO.
Secondly, the two insiders have spent a significant amount of money on Vistra stock. This suggests they are confident that the positive momentum in the share price will continue. Our insider transaction data shows that both insiders picked up stock earlier this year, suggesting their confidence has been building over recent months.
Vistra Corp recently produced an encouraging Q1 update, in which it said that it is increasingly confident that full-year expectations for 2022 will be met and that the power and commodities market will be very favorable in 2023 and beyond.
Operating revenue of $3.13 billion for the quarter was slightly lower than the same period last year, however, the operating loss figure of $288 million was significantly better than the $2.58 billion loss in Q1 2021 when the business was negatively impacted by Storm Uri. Liquidity remained comfortable with the company having access to funds of $3.14 billion.
The group reconfirmed its guidance for full-year 2022, with ongoing operations adjusted EBITDA expected to be in the range of $2.81 billion to $3.31 billion.
“We delivered adjusted EBITDA in the quarter in line with company expectations with increasing confidence in full year 2022, are executing on a comprehensive hedging strategy to capitalize on the beneficial power and commodities markets that is expected to provide significant value to Vistra in 2023 and beyond, and are continuing the advancement of our capital allocation priorities, returning capital through stock repurchases and paying a meaningful and growing dividend,” commented CEO Curt Morgan.
Having read through the recent Q1 update, we see the insider buying at the business as bullish. Two key players at Vistra Corp have added to their positions and this would suggest to us that they are very confident in the future prospects of the business and that they strongly believe the shares are undervalued at present.