In this report we examine stocks that C-level officers and directors  bought and sold ending the week of September 22nd, 2017.  Insiders sell stock for a variety of reasons but they generally buy for just one, to make money.  We only look at material amounts of money, $100k or more, as anything less could be window dressing.  The bar is different on selling as the natural state of management is to be sellers.  Most companies provide significant amounts of their compensation packages as stock. Therefore we analyze selling for unusual patterns; such as insider selling 25% or more of their holdings or multiple insiders selling near 52 wk. lows.  Another red flag is large planned sale programs that just start out of the blue.

We generally ignore 10% shareholders as they tend to be OPM (other people’s money) and not the SMART money we are trying to go to school on.  Although this info is available for free from the SEC’s Web site , Edgar, we subscribe to the Washington Service as they provide a way to manage and make sense from the realms of data. To learn more about our strategy visit our website at The Insiders Fund. We welcome your comments on our analysis. We may own positions long or short in any of these names and are under no obligation to disclose that-So do your own research.

Buying

Revlon REV Ron Perelman bought $13 million worth of the cosmetic manufacturer at an average price of $17.83. The stock went ballistic on this news rocketing to almost $28.

Tiffany TIF 4 insiders step up at luxury retailer. This is very bullish as an insider made a major buy last week As we wrote earlier, TIF is no bargain basement priced stock but with so little insider  buying in the market, we will take whatever we can get.

L Brands LB Director Tessler buys 20,000 shares at $37.  This was a well-timed purchase as the stock within two days printed over $42.  Large insider buys will typically pop a depressed stock like L Brands.  L Brands is reeling from the move to online commerce with hundreds of Victoria Secrets and Bath and Body Works stores in secular decline as foot based traffic declines.  It’s uncertain if  L Brand’s multichannel strategy can adapt to the new world of online shopping.  L Brands is considerably cheaper than Tiffany’s with a P.E. of 12.40 versus Tiffany’s 25.12 but the challenges are considerably greater as Tiffany’s brand is easier to port to the online model.

Restoration Hardware RH Chairman of the Board and CEO Friedman bought $2 million worth of RH at $71.29.  RH looks grossly overvalued (our value is closer to $55) and to keep things in perspective, Mr. Friedman increased his holdings only by 1.3%. It’s unlikely that RH’s move to a more modern look will be enough to move the stock substantially higher once the insider buying enthusiasm wanes.

Selling

(there are so many sales that we only analyze the best short selling opportunities or the very largest)

Car Max KMX  5 insiders dumped $28 million of stock on the market. I can hardly blame them when their stock is down 7.8% and 22% worse than the S&P 500 Index which they are a member of.

Walmart WMT Founding family member R. Walton sells another enormous chunk of stock but $158 million is only 0.01% of his holdings. Walmart doesn’t seem overvalued relative to the indices and they are a viable competitor on-line now with Amazon. I bought something recently substantially cheaper and it arrived when it said it would. My 2 cts. I would not short it..

Box Inc Box Insider director Rory O’Driscoll on 9/15/917 dumps 97.2% of his holdings at an average price of $18.65. Director Daniel Levin unloads 95.4% on 9/5-9/17.VP. McGoff sells 28% on 9/12.  Large VC, private equity and assorted hedge funds are all sellers of this laggard, down

Twitter TWTR   Twitter Evan Clark sells a boatload of Twitter stock, $15.3 million worth.  At first blush this makes a Twitter sale less likely but considering this is only a small part of his holdings, a paltry 2.2%, it may not have any bearing on it.  Make no mistake about it, Twitter is for sale at some price.

Interactive Brokers IBKR three insiders sold $18.9 million worth of stock near a 52 week high. These were all planned sales and I don’t see anything out of the ordinary other than one investor sold 26% of his holdings. With the stock market and interest rates on the rise, it doesn’t look a good time to short this innotvative discount online broker.

Hewlett Packard Enterprises HPE CEO Meg Whitman has stepped up her sales of HPE stock, selling the largest amount in years with her $21.3 million sale for $14.27 on 9-22-17. Whitman also sold another $28 million of options with 2.8 years left on them. I guess Whitman is leaving soon and this is the best its going to get in the near term. HPE is down 4.8% during the last 52wks.

Camping World Holdings CWH The selling continued last week with CWH as three insider sold the majority of their stock in this high flyer.  COO Moody sold over $8 million cutting his ownership by 80%. Officer Nutall sold 80.5% of his holdings and CFO Brody unloaded $5.8 million worth unloading 77.2% of his holdings. I don’t know what’s going on but it could be just that is up 31.5% in the last six months.

Tilly’s TLYS. Tillys has flattish revenues and disappointing earnings yet this teen retailer is up 32.46% in the last 6 months.  This hasn’t gone unnoticed by management as they have been steadily unloading stock.  This looks like a good short candidate.

United Natural Foods UNFI  United is down 24.% YTD but that did’t deter management from unloading stock. UNFI 4 insiders sold $4.6 million worth of stock taking advantage of the Amazon Whole Food merger stock related pop.