Gerald Libin, a major holder of Riley Exploration Permian (REPX), recently added 3,000 shares. The buy increased his stake by less than 1 percent, and came to a total cost of $131,370.
This marks the first insider buy since last October, when Libin was also a buyer of just over $273,000 in shares. Over the past few months, several company insiders have sold, including the company President and the company CEO.
Overall, insiders own 40.2 percent of shares.
The oil and gas exploration company has doubled over the past year thanks to strong energy prices and rising investor interest in the space. That’s true even as Riley has seen revenue slide 22 percent, and earnings drop 81 percent.
Exploration and development companies benefit from consistently higher prices, and wild swings in energy prices can make for an operational challenge. But even with the lower revenue and earnings over the past year, the company has a 37 percent profit margin, high for a commodity producing company.
Action to take: Despite the big drop in earnings, the company trades at just 5 times froward earnings. Shares also yield about 2.9 percent at current prices, with room for future growth as profitability returns.
For traders, shares have been trending higher over the past few weeks. The September $50 calls, last going for about $5.90, offer mid-double-digit returns on a further move higher for Riley shares.
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.