Canadian oil & gas CEOs buying millions in company stock: BMO
According to BMO’s analysis, Cenovus Energy, Spartan Delta, and Kelt Exploration saw the highest levels of total insider buying. (GETTY) · bunhill via Getty Images
Top executives at Canadian oil and gas companies snapped up millions worth of their own firms’ shares as U.S. President Donald Trump’s trade war against Canada roiled the stock market. That’s according to a new report on insider buying from BMO Capital Markets.
In a note to clients on Wednesday, analyst Jeremy McCrea says $27 million worth of open-market purchases occurred over the past 90 days among 28 companies representing nearly two-thirds of the sector.
“Although there are many reasons why insiders sell, there is only one reason they buy,” he wrote. “That in turn should help build investor confidence, especially as it relates to investing alongside management and ultimately, reassurance that there are no ‘skeletons in the closet.’”
Trump’s aggressive trade agenda has caused unprecedented uncertainty for Canada’s oil and gas sector, which ships the bulk of its output to the United States. America’s latest tariffs on Canada include a 10 per cent levy on imported energy products.
According to BMO’s analysis, Cenovus Energy (CVE.TO)(CVE), Spartan Delta (SDE.TO), and Kelt Exploration (KEL.TO) witnessed the highest levels of total insider buying. These three companies also saw the largest purchases by their CEOs.
Cenovus, Strathcona Resources (SCR.TO), Spartan, and Whitecap Resources (WCP.TO) saw other top executives buy stock.
“This category typically includes the operational/engineering body of the management team (chief operating officer, etc),” McCrea wrote. “When management members of this skill-set are buying, their view is more likely based on the underlying asset performance (instead of a commodity/stock-based view).”
Whitecap, Peyto Exploration & Development (PEY.TO), and Saturn Oil & Gas (SOIL.TO) saw broader buying throughout the company.
“It’s typically rare to see broad-based insider buying ‘across the organization’ by the CEO, CFO, and other officers and directors,” McCrea wrote.
“Such occurrences show confidence throughout the organization and are a good ‘proxy’ for how internal personnel feel throughout different departments within the company.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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