ConocoPhillips (COP) And Other Struggling Companies Witness Insider Buying Activity

Park-Ohio Holdings Corp. (NASDAQ:PKOH) saw two different insiders make purchases this week. Chairman and Chief Executive Officer Edward F. Crawford bought 24,500 shares at prices in the range of $34.15 to $35.68 per share and currently owns 1.45 million shares. Director John D. Grampa acquired a new stake of 2,000 shares on Wednesday at $35.59 apiece. The shares of the industrial supply chain logistics and diversified manufacturing company are 45% in the red year-to-date and trade at very appealing trailing and forward P/E ratios. The company has a trailing P/E of 9.10, which is substantially below the mean of 22.73 for the S&P 500 Index, and a forward P/E of 7.41. Park-Ohio reported net sales of $1.12 billion for the first nine months of 2015, up by $110.7 million as compared to the same period of 2014. This top-line growth was mainly achieved as a result of additional sales from acquisitions and an increase in organic volume sales. However, the company’s Supply Technologies business (offers customers solutions that manage the efficiency of supplying production parts and materials from planning to program implementation), which accounts for 40% of revenues, saw revenues increase by 6% year-over-year to $444.7 million. This growth was mainly attributable to strong demand in the heavy-duty truck market, the power sports and recreational equipment market, the semiconductor market, the consumer electronics and automotive markets. Jim Simons’ Renaissance Technologies reported owning 174,100 shares in Park-Ohio Holdings Corp. (NASDAQ:PKOH) through its 13F filing for the third quarter.

Last but not least, we will investigate the insider buying activity at ConocoPhillips (NYSE:COP). Director Arjun N. Murti purchased a 5,000-share stake on Wednesday for $49.9 each. Arjun Murti has also worked as a sell-side equity research analyst responsible for the energy sector at Goldman Sachs, so there is no doubt that he has a better understanding about ConocoPhillips’ future potential and short-term challenges. The independent exploration and production company has had a rough year in terms of stock performance, as its shares declined 31% year-to-date. The increased supply of crude oil and lower anticipated demand growth have pushed crude oil and natural gas prices significantly lower this, affecting the company’s financial and operational performance. ConocoPhillips aims at achieving cash flow neutrality in 2017, and has been taking serious steps towards achieving this goal. The company targets a $1 billion reduction in operating costs as compared with 2014. In August, Moody’s Investors Service downgraded the company’s senior long-term debt ratings to ‘A2’ from ‘A1’, and is currently reviewing the company’s debt for possible downgrades. Nonetheless, even if the company’s credit rating was lowered one level from its ‘A’ rating, ConocoPhillips would not be required to post additional collateral in the form of cash or letter of credit to counterparties. At the same time, the company does not have rating triggers to any of its corporate debt that could result in automatic default. Donald Yacktman‘s Yacktman Asset Management cut its position in ConocoPhillips (NYSE:COP) by 3% during the July-September period to 5.72 million shares.

Disclosure: None