Does insider confidence inspire your investment choices as the owner of an energy portfolio? If this sounds like you then you’re in luck, as a detailed search for companies that have seen more inside buying than selling in the last three months has thrown up the following three Canadian energy stocks. Are they worth adding to your portfolio, or does the data contradict insider sentiment? Let’s dig into the figures and find out.
TORC Oil & Gas (TSX:TOG)
Down 6.3% in the last five days, this potentially overlooked energy ticker had a very positive one-year past earnings growth that shows TORC Oil & Gas is more than capable of outperforming the industry, which itself grew by 17% over the same 12 month period. Though its five-year average past earnings growth was a low 0.7%, a 27.8% expected annual growth in earnings makes this a stock to buy and hold.
With good health indicated by a clean balance sheet that carries an acceptable 22.1% debt of net worth, TORC Oil & Gas has enjoyed some inside buying over the last three months. While its P/E of 27.9 times earnings is a little high, a P/B of 0.6 times book beats the TSX index, while a dividend yield of 5.92% offers a reason for passive income investors to buy.
Parkland Fuel (TSX:PKI)
Up 2.76% in the last five days, Parkland Fuel has a good 12 months, with an earnings growth of 395.3% that beat its own five-year average of 10.8%. As with TORC Oil and Gas, more shares were shifted through inside buying than selling in the last three months; throw in a 35.5% expected annual growth in earnings and a dividend yield of 3.13% and you have even more reason to get invested.
Things to be aware of if you have a low appetite for risk and an eye for value would be a high level of debt at 126.5% of net worth, a P/E of 27.8 times earnings and P/B of 2.9 times book, respectively. If these points concern you, TORC Oil & Gas may be the better choice.
NuVista Energy (TSX:NVA)
Down 2.17% in the last five days, NuVista Energy defied the odds in a tough year and managed to grow its earnings by 9.8%. Overall, its five-year average past earnings growth of 44.5% shows that this is a generally positive stock. It pays no dividends, but a 56.2% expected annual growth in earnings make it a decent capital gains play.
Again, a considerable amount of inside buying over the last three months is what puts NuVista Energy on this list. With a good balance sheet indicated by a debt level of 38% of net worth, and attractive valuation signaled by a P/E of 10.8 times earnings and P/B of 0.7 times book, this is a stock that’s suitable to buy and hold.
The bottom line
Insider confidence and a spread of decent market fundamentals make for three compelling cases in today’s round-up of TSX index energy stocks. If investors want to avoid overexposure to the sector, but still have a gap to fill in the energy section of their Canadian stock portfolio, TORC Oil & Gas would make a good play for dividends, while NuVista Energy offers the potential for capital gains.