Blue Star Exploration Corp, a major holder of Comstock Resources (CRK), recently bought 12,500,000 shares. The buy increased the fund’s position by 7%, and came to a total cost of $100,450,000.
This is the first insider buy in just over a year, since the company CFO bought 20,000 shares for just under $200,000. Going further back, other company executives and directors have been bullish on shares, at a higher price from where Comstock trades today.
Overall, Comstock insiders own 69.1% of shares.
The oil and natural gas exploration company has struggled in the past year amid lackluster energy prices, with earnings sliding nearly 80%.
This year is looking better, as oil prices have started to break out in the past few days, although natural gas has still been a laggard.
Comstock shares have been trending higher since early February, but are still down about 14% over the past year.
Action to take: Smaller oil and gas stocks are more volatile than larger ones, but can offer more upside if energy prices trend higher. Comstock trades at just 7 times forward earnings, and looks attractive as a speculative buy.
Plus, shares pay a sizeable 6.8% dividend yield.
For traders, the uptrend is likely to continue in the months ahead. The June $10 calls, last trading for about $0.50, could see high-double-digit returns or better on a rise in energy prices.
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 company mentioned in this article.