Company insiders may have more access to information, more capital to use, and more influence in the sock market, but they have 1 thing in common with us…
We all like to make money!
So how did this CEO manage to make $240,000 in just 1 week? Like this…
The CEO of Antero Midstream Partners LP (AM) recently purchased 60,000 shares of his company at $25 per share according to Openinsider.com. That transaction was worth $1.5 million!
And this was a new IPO, or initial public offering…
It served him well as the price of AM jumped to $29 per share in just a matter of days, meaning that the CEO’s investment increased by 16%, earning him $240,000.
Now, there is always a possibility that an insider would purchase shares because he or she wants to be optimistic and that’s the only reason for believing the price of the stock will rise.
But AM appears to be a different situation as I look closer.
First of all, while optimism can easily root itself into the high-ranking officers of a company with new stock, it isn’t often the main reason for a person sinking $1.5 million into that stock.
And this purchase wasn’t the acquisition of shares that takes place during the release of a new stock. Instead, it was a direct purchase made by the CEO.
Third, he wasn’t the only insider to purchase shares of AM. Direct purchases were also made by 3 directors and 2 officers in the company at the same price.
That doesn’t sound like a simple case of optimism to me. It sounds more like legitimate confidence.
And where did that confidence come from?
We may never know for sure, but it’s likely that those company insiders knew some information that made it probable for the price of AM to rise.
But how could that be for a company involved in the oil and gas industry, which has struggled mightily.
Well, AM is a master-limited-partnership that is in the oil and gas infrastructure business, which is now booming as we can see with AM and another IPO much like AM.
They own assets that pipe and process oil and gas, so they get paid just for moving the stuff. What they charge isn’t dependent on the prices of the commodities.
This could be a short-term trend, or a long-term fixture in the oil and gas market, so I’m certainly not blowing off AM and other stocks like it.
Instead, I will be looking for IPOs much like AM, but at a cheaper price, to recommend to readers of my Penny Stock Insider monthly newsletter. Check your inbox for an invitation to join it.
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