Top-level insiders such as CEOs and Chairmen tend to have an excellent understanding of their companies’ prospects. If they’re buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight some interesting buying activity from top-level insiders at HighPeak Energy (HPK:US). HighPeak is a Texas-based oil and natural gas company engaged in the acquisition, development, and production of oil, natural gas, and NGL reserves. It is listed on the Nasdaq and currently has a market cap of $2.3 billion.
Our data shows that between September 19 and September 20, both CEO and Chairman Jack Hightower and President Michael Hollis purchased HighPeak stock.
Mr. Hightower made the largest purchase, spending around $8.3 million on shares. Mr. Hollis made a smaller trade, spending around $162,000 on stock.
The two insiders paid between $16.33 and $16.64 per share for their stock.
Both of these insiders have substantial experience in the oil and gas industry.
Mr. Hightower has over 49 years of experience in the industry and has previously served as CEO of Bluestem Energy Partners, Celero Energy II, LP, Pure Resources, Inc., and Enertex Inc.
Meanwhile, Mr. Hollis was previously President and COO of Diamondback Energy, and has also held top-level roles at Chesapeake Energy Corporation, ConocoPhillips, and Burlington Resources.
Given their backgrounds, their recent trading activity is notable.
HighPeak Energy has a very low valuation right now. With analysts expecting the company to generate earnings per share (EPS) of $1.90 this year, and $2.88 next year, the company’s forward-looking price-to-earnings (P/E) ratio is just 8.4, falling to 5.5 using next year’s EPS forecast.
It’s worth noting that in mid-September, the company announced the closing of a $1.2 billion term loan financing. This term loan, coupled with the recent increase in commodity prices, has significantly increased the group’s liquidity and financial flexibility, according to management.
“This refinancing marks a pivotal moment in our company's journey. This unparalleled transaction is one of the largest privately arranged financings for a public energy company. The unique structure provides the company with the ability to have a long-term capital plan, financial security, and great flexibility to repay the loan in advance. We are stronger, more resilient and equipped to seize opportunities in this dynamic energy market. We believe this newfound financial strength will enable the company to pursue strategic opportunities and drive shareholder value,” said Mr. Hightower after the financing was announced.
In light of the low valuation and the financing deal, we see the insider buying here as bullish.
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