Mark Dewalch, a director at Black Stone Minerals, LP (BSM), recently bought 44,000 shares. The buy increased his position by 14 percent, and came to a total cost of $761,952.
The buy came a few weeks after the company CEO made two buys, totaling 108,577 shares. Those two buys came to a total cost of $1.4 million. Going further back, insider buys have far exceeded a small number of insider sales over the past two years.
Overall, Black Stone insiders own 22.6 percent of shares.
The oil and natural gas mineral interest owner is down about 5 percent over the past year, as energy prices have whipsawed. Earnings and revenues are off substantially as well.
However, as a mineral rights play, shares are well valued relative to the revenue of the royalties they bring in. And Black Stone has a massive 83 percent profit margin.
As a partnership, Black Stone pays off its earnings as distributions, leading to a high yield. At current prices, shares yield nearly 11 percent.
Action to take: Those looking for a high yield and who can invest in a partnership structure for tax purposes may like shares here. Energy prices are down, but Black Stone’s mineral rights model provides ample cash flow.
For traders, shares have been trending higher since March. The April 2024 $15 calls, which are about $2.30 in-the-money, last traded for about $3.00. A further move higher in shares should lead to mid-double-digit returns on the options by expiration.
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.