Insiders Are Backing Up the Truck to Buy These 4 Energy MLPs

Energy

Published: March 8, 2016 10:35 am

Last Updated: January 13, 2020 12:14 pm

One of the best indicators in any sector, during any kind of market conditions, is insider activity. When insiders and 10% owners are buying stock, they are often also giving their personal vote of confidence on a specific company. We cover insider buying and selling every week here at 24/7 Wall St., and needless to say, one of the sectors we have seen a tremendous amount of activity in, especially over the past six months, is energy.

A recent, very in-depth report from RBC focuses on insider buying in the energy master limited partnerships (MLPs), and some of the companies are seeing incredible buying, especially since the market was hammered again to start off 2016. We found four companies that have literally had millions of shares purchased by insiders. Some of the companies we have reported on in our weekly coverage of insider activity.

Crestwood Equity Partners

This company is the leader with a massive 5,004,372 shares of the stock having been purchased by insiders. Crestwood Equity Partners L.P. (NYSE: CEQP) owns and operates midstream businesses in multiple unconventional shale resource plays across the United States. Crestwood is engaged in the gathering, processing, treating, compression, storage and transportation of natural gas; the storage, transportation, terminaling and marketing of natural gas liquids; and the gathering, storage, terminaling and marketing of crude oil.

Crestwood pays a giant distribution, which many think it could be struggling to maintain. Even so, the insiders have continued to buy the stock at a frantic rate. With a fee-based generation of income, even with a dividend cut it is intriguing.

Crestwood investors receive a massive 68.0% dividend, or $1.375 per quarter. The Thomson/First Call consensus price target for the stock is $12.17. The shares closed Monday at $9.40, up over 16% on the day.