R.A. Walker, a director at Conoco Phillips (COP), recently bought 10,400 shares. The buy increased his stake by 30%, and came to a total cost of $1,017,161.
He was joined by another director last week, who bought 2,500 shares, paying just under $240,000 to do so. The two buys are the first since February 2023. Otherwise, company insiders, including both the CEO and CFO, have been sellers over the past two years.
Overall, Conoco Phillips insiders own 0.1% of shares.
The oil and gas giant is down 20% over the past year. Conventional energy prices have been lackluster in 2024, and that’s reflected in COP’s returns. Earnings have slid 26%, although revenues are down only 8%.
Conoco remains an industry leader, and even in a lackluster year for energy prices, managed to earn a profit margin of 17%, a solid return for a commodity-related company.
Shares trade at 10 times forward earnings, a reasonable valuation for an energy company. At current prices, Conoco pays a 3.3% dividend, although it did recently cut its payout.
Action to take: On a valuation basis, shares look attractive, but the stock just broke to a 52-week low. Investors should wait for signs of a bottom before buying in.
For traders, with a short-term trend heading lower, investors may fare best with a put option trade for further downside. The March 2025 $90 puts, last trading for about $2.80, could see mid-double-digit returns on a further downside in the months ahead.
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.
