Matthew Ramsey, a director at
Sunoco LP (SUN) recently picked up 2,500 shares. The buy increased his holdings by just over 3 percent, and came to a total price just under $94,000.
This follows up on a 2,500 share buy from another director just two weeks ago. Prior to that, insiders have been both buyers and sellers at the energy firm, with insider buys far outweighing sales by insiders over the past three years.
Overall, insiders own 34.5 percent of shares.
Shares of the oil company are up about in-line with the S&P 500 over the past year. While the company is still returning to profitability, higher energy prices have led to a surge in revenue, and share still look inexpensive going forward, with shares trading at less than 11 times forward earnings.
Action to take: Investors may like shares here as an inexpensive way to play today’s high energy prices. As an LP, the company also pays a sizeable dividend, yielding about 8.8 percent right now. The downside? Since the LP structure pays out so much cash flow as a dividend, there’s only modest room for dividend growth should energy prices move higher.
For traders, the multiple insider buys here look like a reasonable sign that shares should keep trending higher. The March $40 calls, last going for about $0.70, have the potential for a mid-to-high double-digit move higher in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.