Two energy firms caught up in a recent price slump saw large insider share purchases.
President Joe Biden's pledge to increase natural-gas exports to Europe hasn't benefited every name in that sector. In fact, a fire at a liquefied-natural-gas shipping facility in Texas earlier this month greatly reduced export capacity, sending commodity prices—and natural-gas stocks—sliding.
Both Oneok (ticker: OKE), an operator of natural-gas pipelines, and shale firm Chesapeake Energy (CHK) have seen shares fall 17% and 14% so far in June, but Oneok stock is also in the red year to date, down 7.1%. That's better than the 18% drop in the S&P 500 so far in 2022, but worse than the 30% gain in Chesapeake stock.
Oneok reiterated 2022 guidance when it reported first-quarter earnings in early May . Truist analyst Neal Dingmann reiterated a Buy rating on Oneok stock with a $78 price target. "We look for 2022 as an execution year with continued benefit from the commodity," Dingmann wrote.
Oneok President and CEO Pierce H. Norton paid $500,000 on June 17 for 8,975 shares, an average price of $55.54 each, according to a form he filed with the Securities and Exchange Commission. He now owns 9,414 shares. It was Norton's first open-market stock purchase of Oneok stock since he was named to the top post on June 28, 2021. Previously, he was president and CEO of One Gas (OGS), a utility Oneok spun off in 2014.
Oneok didn't respond to a request to make Norton available for comment.
Chesapeake noted the slump in its stock price, and last week doubled the authorization for buybacks of shares and warrants to $2 billion from $1 billion through the end of 2023. "We firmly believe our stock is undervalued," CEO Nick Dell'Osso said in a release.
Credit Suisse analyst William Janela raised estimates with the increased buybacks, writing in a report that 2022 and 2023 cash-flow per share could rise 3% and 7%, respectively. He rates Chesapeake stock at Outperform with a $115 price target.
Josh J. Viets, Chesapeake's chief operating officer, paid $206,800 on June 16 for 2,450 shares, an average price of $84.41 each. He now owns 25,804 shares. That was Viets' first purchase since he stepped into his current post in February of this year. He was most recently a ConocoPhillips (COP) executive.
Chesapeake didn't respond to a request to make Viets available for comment.
Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.