Will Insiders Be Tempted To Buy More ARP At The New 52-Week Low?

In trading on Friday, shares of Atlas Resource Partners, L.P. (ARP) touched a new 52-week low of $18.74/share. That's a $4.44 share price drop, or -19.15% decline from the 52-week high of $23.18 set back on 03/14/2014. Large percentage drops always require that the stock post even larger percentage gains from the low in order to recover the old price point, and for ARP that means the stock would have to gain 23.69% to get back to the 52-week high. For a move like that, Atlas Resource Partners, L.P. would need fundamental strength at the business level.

Here's a rhetorical question: Who knows more about fundamentals at the business level than the company's own insiders? So let's take a look to see whether any company insiders were taking the other side of the trade as ARP shares were being sold down to this new 52-week low, focusing on the most recent trailing six month period. As summarized by the table below, ARP has seen 2 different instances of insiders buying over the past six months.

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Ten Bargains You Can Buy Cheaper Than The Insiders Did »

Purchased Insider Title Shares Price/Share Value
04/21/2014 Leon G. Cooperman 109,700 $20.16 $2,211,552.00
04/25/2014 Leon G. Cooperman 21,800 $20.36 $443,848.00
05/09/2014 Leon G. Cooperman 74,475 $19.22 $1,431,643.75
05/19/2014 Jonathan Z. Cohen Vice Chairman 20,000 $19.74 $394,800.00
05/19/2014 Edward E. Cohen Chairman & CEO 40,000 $19.83 $793,360.00

In the short run, while the new 52-week low suggests the stock is at the cheapest price and perhaps therefore the best bargain it has been over the last 52 weeks, the low print also means anyone who has purchased the stock over that timeframe is staring at an unrealized loss. Oftentimes, that factor drives a stock's technical analysis metrics by creating overhead resistance, with investors who bought higher now anxious to reverse their trade once they are back to breakeven. The chart below shows where ARP has traded over the past year, with the 50-day and 200-day moving averages included.

Atlas Resource Partners, L.P. Moving Averages Chart

Time will tell whether the insider purchases foretell a future rebound for ARP shares, which are presently showing a last trade of $18.85/share, slightly above the new 52-week low.

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