Oil and gas stocks have been the beneficiaries of the current macro environment and rising crude prices. Shares of SliverBow Resources (SBOW), which had run up nearly 200% since November 2021, have corrected as much as 50% in the past month.
SilverBow Resources is a growth-oriented independent oil and gas company headquartered in Houston, Texas. The stock currently has a short interest of almost 15.5%, which means bears are slowly gaining the upper ground.
At such a time, positive insider moves send a very strong signal to investors, especially when broader markets are in a slump and consumer demand is cooling off.
This is a case in point for SilverBow, where a major insider just scooped up a large chunk of its shares. Kimmeridge Energy Management, which already owns more than a 10% stake in the company, bought its shares worth $16.98 million yesterday.
Most importantly, this informative Buy now takes Kimmeridge’s total holding in SilverBow to $96.9 million.
Moreover, our insider tool highlights that Kimmeridge has had a winning streak so far, with 100% profitable transactions and an average return of 73.2%.
SBOW’s Promising Financials
SilverBow has been a beneficiary of the energy price rise in recent times and has increased its top line from $177.4 million in 2020 to $407.2 million in 2021. Likewise, its earnings per share (EPS) have expanded from $2.07 in 2020 to $9.87 in 2021. These figures are further expected to rise to around $580 million and $11.8 per share, respectively, in 2022.
Moreover, on the back of its recent Sundance acquisition, SilverBow sees over a 100% increase in oil production for 2022 and expects to generate about $250 million in free cash flow for 2023.
Hedge Funds Are Buying SilverBow Too
At the same time, the TipRanks database indicates hedge funds have increased holdings in the stock by 31,000 shares over the last quarter, which indicates a positive hedge fund confidence signal for SBOW.
Furthermore, Chuck Royce’s Royce & Associates is a new entrant in the stock with a holding of about $1.32 million.
While SilverBow shares have corrected nearly 39% over the past month, the company continues to make all the right moves. At such a juncture, this positive insider action sends the right signal to shore up investor confidence in the stock.
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