Energy Transfer Equity
One name in the energy space where insiders have been snapping up lots of shares is Energy Transfer Equity (ETE), which, through its direct and indirect investments in the limited partner and general partner interests in Energy Transfer Partners, engages in midstream, intrastate and interstate transportation of natural gas, as well as in storage of natural gas in the U.S. Insiders are buying into strength with ETE since shares are up over 14% so far in 2011.
Energy Transfer Equity has a market cap of $10 billion and an enterprise value of $19 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 60 and a forward price-to-earnings of 19. This is not a cash-rich company; it has$9.94 billion in debt on their balance sheet and just $145.67 million in cash.A director just bought 50,000 shares, or $2.2 million worth of stock, at $44.95 per share. This same director recently participated in a private placement of 700,000 shares of ETE stock at $41.98, worth a whopping $29.39 million. From a technical standpoint, ETE recently broke out above $46 a share and ended up hitting a high of $47.34 before pulling back below the breakout point. Now the stock is trading right around $45 a share, just a few points above the 50-day moving average of $43 a share. If you're looking to buy this stock, I would wait for it to breakout above $47.34 and then load up as long as volume is strong. Look for volume that's well above the three-month average action of 443,000 shares. Another strategy is to buy this stock on any weakness that takes shares towards $43 to $42 a share. Use a tight mental stop in case the stock wants to trend lower. Energy Transfer Equity was recently highlighted in "7 Dividend Stocks Rewarding Shareholders."
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