Arkoma Drilling, a major holder of
Comstock Resources (CRK), has been a sizeable buyer of shares. In five buys this month, the partnership has bought nearly 8 million shares. That’s increased the fund’s position by nearly 4% at a cost of over $81 million.
Another major holder has also been a buyer of shares this month, with a $21 million buy for 2.47 million shares. Going further back, three company executives were buyers last year.
Overall, Comstock insiders own 73.2% of shares.
The oil and gas exploration company’s stock has dropped about 12% over the past year. This reflects a weak market for oil and natural gas prices.
Operationally, Comstock has struggled. Revenues also dropped 12%, and earnings growth was non-existent. However, shares trade at 7 times forward earnings, which may be why major insiders are upping their stake at this current valuation.
Action to take: Investors have a number of attractive energy plays at current prices. Comstock may be one of them, with shares showing positive momentum in recent trading sessions. Comstock recently cut its dividend, so investors won’t get paid to wait.
For traders, the December $11 calls are an at-the-money trade. Last trading for about $1.25, they could see high double-digit returns over the coming weeks on a further trend higher in energy stocks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
