Impressive insider transactions in Canadian energy & real estate trusts for November

This article is about notable transactions of both Canadian real estate stocks/REITs and Canadian energy stocks for the month of November. There has been notable transactions particularly in real estate stocks over the past year that I have been intrigued by and in some cases led me to take my own positions based on insider buying and uncovering catalysts. While Canadian energy is far from a cyclical bottom as real estate stocks are, continued insider buying on market is encouraging and shows that the best and most knowledgeable in the space still see opportunity.

EYE-CATCHING REAL ESTATE INVESTMENT TRUST BUYING IN NOVEMBER 2023

• ALLIED PROPERTIES: trustees added 11,900 in November, not a huge amount but this is the second month of insider buying activity for this high quality office REIT which is currently yielding double digits after months of dormancy.
  

• ARTIS REIT: the REIT purchased 18,600 preferred shares on the market at nearly a 50% discount to face value. Artis’ NCIB is maxed out on common units and Series E, leaving only Series I prefs as purchasable until the NCIB renews itself, expected in mid December. Artis is currently under a BMO-supersized strategic review so insiders are likely under blackout outside of the automatic NCIB. Artis had seen heavy insider buying earlier in the year in addition to the NCIB maxed.
  

• BSR REAL ESTATE INVESTMENT TRUST: I don’t follow this one nor do I follow the U.S. residential market but some friends like it. The insider buying in the past week was one of the largest I’ve ever seen with 529,000 units purchased by the vice chairman of the REIT. Needless to say he believes in the story.
  

• Canadian Tire REIT: the REIT purchased 222,030 via its NCIB and saw an additional insider buy on the market of 12,500.
  

• Dream Unlimited: Michael Cooper’s personal baby bought back 95,000 units in the month of November. Trading at nearly 1/3 of its NAV if you believe it.
  

• Firm Capital REIT: another name I haven’t got around to investigating but the insider buying all year has caught my eye and impressed me. Insiders added 51,845 units in the month of November.
  

• Inovalis REIT: this European-focused office REIT recently was forced to temporarily suspend their distribution. The insider buying has since been off the charts with 437,700 units bought by the team in November. A strong testament in my view to their conviction in the REIT’s ability to weather the storm.
  

• Morguard North American Residential REIT: the parent company Morguard Corporation bought 176,500. At the same time George Armoyan is buying at Morguard Corporation, a very illiquid REIT majority owned by insiders. Have to wonder if there is some privatisation shenanigans about to occur.
  

• Morguard Real Estate Trust: the Armoyan clan added 177,500 units here.
  

• True North Commercial REIT: this office REIT recently took a tactical decision to temporarily stop their distribution to go full throttle on the buybacks to the intrinsic value discount of said NAV ($4.75 v. $1.33 trading price). The CEO Daniel Drimmer who added several million earlier in the year at over twice the current trading price began to buy immediately again as the REIT suffered with 67,970 units purchase (adjusted for the 5.75-1 reverse split) in addition to the everyday buying of its NCIB with another 79,429. TNT is the first REIT to max out NCIB by diverting distribution so will be interesting to see if the strategy pays off next year when rates might be lower and REITs may be back in favor.
  
  

EYE-CATCHING INSIDER BUYING IN ENERGY FOR NOVEMBER 2023

• Arc Resources: with an impressive 2.45 million shares canceled in November, Arc is quickly proving itself as one of the most ‘new’ reliable NCIB executors. With relatively positive fundamentals for Canadian natural gas and condensate going forward, there is little reason to expect it to slow down anytime soon.
  

• CNRL: aside from the massive insider selling, CNRL’s NCIB canceled 4.55 million shares in addition to lofty dividend payouts. This company has led the space in selling, tough to fault management as the bloated premium multiple and large insider stakes of the guys selling leaves little room for skeptism.
  

• CES Energy: with 1.965 million shares canceled by the NCIB in November, CES Energy continues to flex its buyback in addition to the recently hiked dividend. It is one of the best performing energy stocks on the TSX this year as its fluid and chemical business ramps up after being a laggard for the past couple years.
  

• IPCO: with 571,700 shares canceled by its NCIB in November, lesser known IPCO continues to assert itself as one of the best buyback companies in the energy space. This likely only ramps up as the company’s major Blackrod project eventually comes online adding significant FCF.
  

• Kelt Exploration: the company’s CEO David Wilson exercised 110,000 at $4.71. He has bought millions over the past several years so to see him continue to buy is certainly a positive sign for a development exploration company.
  

• MEG Energy: MEG is one of the best performing energy stocks in North America this year, the company continues to chip away at their pricier debentures, knocking off $16.7 million in November in addition to ramping its NCIB.
  

• Obsidian Energy: “only” 8600 purchased in November but the continued trend of insider buying at Obsidian is worth noting. Their CEO has added millions in the past months during a mini-downturn. It’s an underfollowed stock that doesn’t get much attention, including by me who doesn’t fully understand it. On my to-do list.
  

• Parex Resources: with 420,000 shares canceled by the NCIB in November, Colombian-focused Parex continues to fulfill its reputation as a top 3 best in class buyback machine over the past 5-years, only rivaled by the likes of Trican Well Service & Imperial Oil (including its SIB)
  

• Peyto Exploration: the CEO added 10,000. The team has been adding aggressively for the past couple years. I feel a bit regretful for not buying into this as I wrote about the impressive insider buying a couple years ago when they ramped up ahead of the dividend hikes, but happy for anybody involved. Shows a good level of confidence in the company’s recent acquisition and domestic gas market.
  

• PrairieSky Royalty: two insiders added 44,000 shares in the past week. That’s a lot. Especially consider the royalty company is trading near a high, it is very interesting to see insiders with such commitment and confidence. Prairiesky has been a top performer in the space with multiple dividend hikes. The CEO and other members of the team added regularly throughout the year.
  

• Trican Well Service: this oilfield service company has been a leader on the TSX for executing its NCIB in the past 5-years, including during the downturn and finally appears to be paying off as a top performing in the space in 2023. Trican retired another 492,800 units in November. I think the company will up its yield in the coming months in addition to full utilization of the NCIB.
  

• Whitecap Resources: with 5.5 million shares canceled in its NCIB in November, Whitecap may finally be appeasing the NCIB crowd. Now only if they don’t issue more for a new toy in the coming year! Insiders also continued the buying with 47,000 shares across the board and for a change, not the CEO.
  
  Thank you for reading & I welcome your comments.
  
  Chris in Canada