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Oil and Steel Stocks Are Crushing the Market. Insiders Have Been Buying.

Fracking pioneer Continental Resources, and energy explorer EOG Resources saw large insider stock purchases. So has steelmaker Cleveland-Cliffs.

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A rally in energy, on higher oil prices, and steel, due to anticipated infrastructure spending, has sent stocks in those sectors soaring.

Continental Resources (ticker: CLR), EOG Resources (EOG), and Cleveland-Cliffs (CLF) shares have respectively surged 182%, 80%, and 39% so far this year, far outstripping the 26% gain in the S&P 500 index. Executives and directors at those companies apparently expect more gains: They recently have been buying millions of dollars of stock.

Harold Hamm, founder and chairman of Continental Resources, a pioneer in hydraulic fracturing, paid $16 million from Dec. 1 through 3 for a total of 367,020 shares, giving him an average price of $43.82. According to forms he filed with the Securities and Exchange Commission, Hamm now owns 14.2 million shares in a personal account, and 283.1 million shares through a limited liability company.

Continental Resources didn’t respond to a request to make Hamm available for comment. Hamm is a frequent buyer of the stock, most recently paying $5.2 million on Nov. 9 for 108,500 shares, a per-share average price of $47.69.

EOG Resources director Michael Kerr paid $4.3 million on Nov. 26 for 50,000 shares of the energy explorer. Kerr now owns 157,570 shares, most of which were received through his service on the board, which he joined last year. He is a former equity portfolio manager at Capital Group, the sponsor of the American Funds.

EOG Resources declined to make Kerr available for comment. The stock purchase is his first, and also the first open-market stock acquisition by an EOG Resources insider since 2014. That December, director Donald Textor paid $278,600 for 3,000 shares, an average price of $92.86 each.

Steelmaker Cleveland-Cliffs saw $1.6 million in stock purchases from its top management, led by Chairman, President, and CEO Lourenco Goncalves, who paid $1 million on Dec. 1 for 50,000 shares, an average price of $19.77 each. He now owns 4.6 million shares. Goncalves’ most recent previous purchase was in March 2020, when he paid $900,000 for 200,000 shares, for an average price of $4.49.

Cleveland-Cliffs Chief Financial Officer Celso Goncalves, son of the CEO, paid $206,500 over Nov. 29 and 30 for a total of 10,000 shares, an average price of $20.65 each. After this, his first open-market stock purchase on record, the CFO now owns 83,920 Cleveland-Cliffs shares.

Keith Koci, president of Cleveland-Cliffs Services, paid $218,270 on Nov. 19 for 10,000 shares, a per-share average price of $21.83. His most recent previous stock buy was in March of this year, when he paid $201,700 for 15,000 shares, giving him an average price of $13.45.

Director Ralph Michael III paid $201,000 on Dec. 10 for 10,000 Cleveland-Cliffs shares, a per-share average of $20.11 each. A Fifth Third Bancorp (FITB) executive, Michael now owns 147,136 Cleveland-Cliffs shares. He joined the steelmaker’s board last year, and this is his first open-market purchase of stock.

Cleveland-Cliffs didn’t respond to a request to make its insiders available for comment.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at [email protected] and follow @BarronsEdLin.

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