Nicholas O’Grady, CEO of Northern Oil & Gas (NOG), recently picked up 1,000 shares. The buy increased his position by less than 1%, and came to a total cost of $27,480.
The buy came a few days after a company director bought 20,000 shares, paying just over $552,000 to increase his position by 6%. A second company director also recently picked up over 40,000 shares, for a buy of over $1.1 million.
This cluster buy is in sharp contrast to the past two years when insiders have been sellers of shares at higher prices. Overall, Northern Oil & Gas insiders own 8% of shares.
The oil and gas exploration company has slid 25% over the past year, reflecting poor pricing for oil and gas stocks. NOG saw its earnings growth decline by 80%, although revenues rose by 1%.
Even with a shaky pricing for markets, NOG was able to earn a 26% profit margin, a hefty level for a commodity company.
Action to take: On a valuation basis, shares look attractive at about 7 times forward earnings. Plus, NOG just increased its dividend payout for a hefty 6.5% yield, which is well covered by earnings.
For traders, shares recently hit a new 52-week low, but may see a short-term bounce from here. The April $30 calls, last trading for about $0.75, could see mid-double-digit returns on a bounce higher in shares over the coming weeks.
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.