Robert Macalik, an EVP at Matador Resources Company (MTDR), recently bought 1,500 shares. The buy increased his stake by 1%, and came to a total cost of $60,750.
He was joined by another EVP, who bought 750 shares for just over $30,000 at a slightly lower price on the same day. Going further back, numerous directors and other company insiders, including the CEO, have been buyers of shares with over two dozen pickups this year.
Overall, Matador Resources Company insiders own 6.9% of shares.
The oil and gas exploration company is down by over 35% in the past year, as oil and gas prices have been trending lower.
However, Matador has remained highly profitable, with revenues up 28% and earnings up 24%. Even with that growth, shares are still inexpensive at 7 times forward earnings, and with the company sporting a 27% profit margin, a hefty level for the industry.
Action to take: Long-term investors may like shares in the low $40 range as the company’s growth could lead to a higher multiple, especially if energy prices take off.
At current prices, Matador pays a 3.1% dividend, which it just substantially raised. With a payout ratio of 12%, there’s room for considerably more income in the future.
For traders, shares appear to have oversold in the recent market selloff and are trending higher. The August $45 calls, last trading for about $2.55, could see mid-double-digit returns from a rebound lasting through the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.