How High Can Insider Buying Push Halcon?

Energy

Published: June 2, 2015 12:20 pm

Last Updated: June 2, 2015 12:21 pm

As stocks in the energy sector have been feeling the heat recently, the chairman and CEO of Halcon Resources Corp. (NYSE: HK), thought it would be a good time to pick up some more shares of his company. Floyd Wilson picked an opportune time and bought these shares hovering just off of all-time lows.

We cover insider buying each week here at 24/7 Wall St., and the number of high level executives and 10% institutional owners adding to positions has been solid in recent weeks. Insiders buy stock for many different reasons, but obviously the main one is they work at or close to the company and like what they see.

By the looks of it, Floyd Wilson is trying to pull his company out of a serious slump. His plan was to drive up the share price by purchasing more stock in Halcon. At the same time he is signaling confident optimism to investors.

On May 28 and 29, 2015, Floyd Wilson purchased a million shares in a price range of $1.025 to $1.04 per share. Ultimately this ended up costing him a total of $1.035 million.

Currently, Floyd Wilson directly owns 4.76 million shares, and 525,000 shares indirectly.

Floyd Wilson filed Form 4 with the Securities and Exchange Commission (SEC) to report his transactions in his company’s shares. According to this regulatory body, open market purchases and sales must be reported within two business days of the transaction.

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It was practically a year ago when share prices were hitting a multiyear high at $7.50. However, over the course of the year shares have subtly slid to all-time lows, which is just below where shares are currently residing.

The company normally trades about 5.2 million shares daily, and it has a market cap of $720 million.

On Monday, when this buy was made public, shares rallied as much as about 7% but eventually backed off to the closing price of $1.07. Shares of Halcon were up 17% at $1.25 on Tuesday. The stock has a consensus analyst price target of $1.70 and a 52-week trading range of $1.01 to $7.50.

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