Major owner adds to stake.
Highbridge Capital, a major owner in Parker Drilling Co. (PKD), added another 43,029 shares. The buy increased the fund’s stake by nearly 2.9 percent. The purchase price came to just over $760,000.
This marks the first insider activity at the company this year.
Last year saw only sales by insiders, dominated by repeat sales from another fund with a major stake. A few corporate employees sold off shares as well.
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Shares of the oil and natural gas drilling company have struggled in the past few years, but a series of reverse-splits have allowed the company to stay listed on the NYSE.
Action to take: On a valuation basis, shares look better than the drilling industry as a whole right now. Shares trade around 6 times forward earnings, and the company trades at less than half its price to sales.
However, the company is currently operating at a loss, and slight insider buying in the industry doesn’t mean an immediate turnaround.
Given that shares have bounced around between $15 and $20, and currently go in the high $17 range, prospective investors would be best to wait for a pullback under $16 before building a stake.
Speculators would likewise want to wait for a drop, so that they could buy call options with a $20 strike to bet on the next swing upward. Shares currently are in a downswing, having slid from over $22 at the start of the year.