Insiders at Oil Driller Hit a Geyser
MONDAY, MARCH 21, 2005 5:26 p.m. EST
By WENDY ALLARD
THE TOP TWO EXECUTIVES at Nabors Industries, a major oil drilling company, have recently sold about $377 million worth of shares that have drifted higher with rising oil prices.
Eugene Isenberg, chairman and chief executive officer at Nabors Industries, exercised options on 4.8 million shares and sold the shares for a total of $272 million.
And Anthony Petrello, president of Nabors exercised options and sold 1.8 million shares for a total of $105 million.
After the sales, Isenberg holds 1.8 million shares and Petrello holds 150,000 shares.
"Given the magnitude of the sales it would appear to be worthwhile for investors to consider selling some shares or rebalancing their portfolios," says David Coleman, editor of the Vickers Weekly Insider.
These sales come on the heels of major selling last month at some other oil drilling concerns that have enjoyed outsize runs in their share prices. See Inside Scoop "Insider at Oil Drillers Are Selling," Jan. 31, 2005.)
Shares of Nabors Industries have gained 29% in the past 12 months.
Denny Smith, director of corporate communications at Nabors Industries, noted that the Nabors executives have sold into strength in the past and haven't sold shares since March 2000.
"They usually sell together", says Smith. "Including options Isenberg has 8.5 millions shares. So it's not like we think Armageddon is around the corner."
The stock fetches 20.3x projected earnings for the next four quarters compared to it median P/E of 24x earnings, according to Thomson Financial Baseline.
Prabhas Panigrahi of EKN Securities notes that the oil services sector may tread water in the short-term.
"We don't think the sector has tremendous upside," says Panigrahi. "All of the positives are in the stocks, and Nabors is squarely positioned in the middle."
At 138.51, the Philadelphia Oil Service Sector Index has gained 33% in the past year.
Panigrahi has a rating of neutral and a price target of 140 on the index. |
