Healthequity Inc. (HQY) and Two Struggling Oil-Related Companies Register Insider Selling; Should Investors be Worried?

Oil Services Company Registers Insider Selling Despite Stock Being Down 17% in 2016

TETRA Technologies Inc. (NYSE:TTI) saw a member of its executive team sell a sizable block of shares earlier this week. Elisabeth K. Evans, Vice President of Human Resources since January 2013, discarded 16,205 shares on Thursday at prices that fell between $6.00 and $6.07 per share. After the recent sale, Ms. Evans currently holds an ownership stake of 31,908 shares.

The aforementioned insider selling may be worrisome for investors given that the oil services company has seen its market value plummet by 17% since the start of the year amid efforts to reduce debt burden. In fact, the insider selling comes shortly after TETRA Technologies Inc. (NYSE:TTI) completed a public offering of 11.50 million shares at a price of $5.50 per share, in an effort to reduce debt. The net proceeds from the offering will be used to repay indebtedness outstanding under the company’s senior secured notes and revolving credit facility, as well as cover general corporate expenses. The company’s weak stock performance, relatively unhealthy balance sheet and disappointing financial performance primarily reflect the depressed oil and gas services environment. Lower demand for the company’s products and services reflects the overall reduction in drilling and completion activity.

TETRA Technologies reported revenues of $169.33 million for the first quarter, which decreased from $251.09 million recorded a year ago. There were 15 asset managers from our database invested in the oil services company at the end of March, which amassed roughly 12% of the company’s total number of outstanding shares. Dmitry Balyasny’s Balyasny Asset Management reported owning 6.20 million shares of TETRA Technologies Inc. (NYSE:TTI) in its latest 13F.

Oil and Gas E&P Company Sees CEO Sell Shares, Should Investors Be Worried?

The most influential executive at Panhandle Oil and Gas Inc. (NYSE:PHX) also sold some shares earlier this week. President and CEO Michael C. Coffman discarded 100 Class A shares on Tuesday for $16.50 each and 24,000 Class A shares two days later at $16.00 apiece. Following the recent transactions, Mr. Coffman continues to own 281,074 Class A shares.

The shares of the oil and gas E&P company are up a little less than 1% thus far in 2016. Panhandle Oil and Gas Inc. (NYSE:PHX)’s oil, NGL and natural gas sales for the first three months of 2016 were $6.14 million, down by $6.30 million relative to the same period of the prior year. The decrease was attributable to decreases in oil, NGL and natural gas sales volumes of 21%, 22% and 19%, respectively, as well as a massive plunge in oil, NGL and natural gas prices. Meanwhile, the company’s net loss for the first three months of the year was $7.44 million, as compared to net income of $704,207 reported a year ago. The company’s oil production decrease reflects the natural production decline from the Eagle Ford Shale in South Texas, as well as declining production from twelve fields in Oklahoma, Texas and New Mexico.

The oil and gas E&P company had $54.50 million outstanding under its credit facility at the end of March, with the effective interest rate being 2.67%. However, the company’s borrowing base under its credit agreement was lowered to $80 million from $100 million earlier this month, while cash and cash equivalents were less than $0.5 million on March 31. Douglas T. Granat’s Trigran Investments owns 1.53 million shares of Panhandle Oil and Gas Inc. (NYSE:PHX) as of March 31.

Disclosure: None