$BK,$MRVL,$PM,$PNFP,$GS,$CVTI,$TACO,$T,$LMT,$MAA,$CLDR

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

Del Taco Restaurants TACO Chairman Levy bought 200,000 shares at $12.54 increasing his holdings by 8%.  Director Aptman purchased $355k worth increasing her holdings by 2.7%  Aptman purchased a similar amount in May of this year.  Both officers took advantage of a 21% collapse in price on Oct 20 when Del Taco reported in-line Q3 earnings and narrowed its FY17 outlook.

AT&T T  Director Rose took advantage of share price weakness to increase his holdings by 10x with his $1.o million purchase of stock at $33.75. AT&T has a dividend yield of 5.77% and there appears little chance of them reducing it as they just reaffirmed quidance on October 24th.

Lockheed Martin LMT Director Akerson scooped up 2500 shares at $312.02 on a small pullback related to its 3rd quarter earnings call. This looks like a timely short-term buy as defense stocks have been on a tear and LMT is likely to resume the uptrend soon.  LMT missed analyst estimates by $0.03, missed on revenues gut guided FY17 EPS above consensus. The market punished LMT with a 12 point stock drop. We are buying this name Monday if it opens close to unchanged.

Mid-America Apartment Communities MAA  Drector Sanders bough 7000 at $100.11 of this REIT when it reported 3rd quarter earnings of $1 versus $1.12 in the quarter the previous year. Its hard for us to get excited about a low yielding REIT in a rising interest rate environment even with is 6% earnings related price drop.

Tile Shop Holdings TTS  Director Kamin doesn’t appear opposed to losing more money on his investment as he purchased an additional $470.2k worth of stock adding to his underwater previous buys.  CFO Geadelmann joined the pain train doubling his holdings with 10,000 additional shares at $8.52.

Cloudera  CLDR  Director Martin Cole purchased 30,000 shares of storied big data software pioneer at $15.07.  This is a rare purchase in a hot sector so we are likely to join him here Monday if the stock doesn’t pop too much as the buy was reported after hours Friday. Be sure to do your homework on this one as the Company just laid an egg with a 3 million share offering on 9-28 priced at $16.45. That means they are a lot of underwater and ostensibly unhappy owners waiting to recoup some of their money near the offering price.

Selling

Bank of New York Mellon BK  Trian is a well-known mega alternative investment manager led by Nelson Peltz and Chief Investment Officer Edward Garden.  So it’s noteworthy when one of the largest and highest profile hedge fund managers reverses a long time buying decision. Starting in August and continuing last week, Garden unloaded $850 million of Bank of New York Mellon. Prior to this, Garden had been exclusively purchasing shares at BK since January 2015, making his recent decision to sell worth noting. Additionally, Garden’s previous acquisitions have been well-timed. His purchases yielded an average annual return of 12.9%, earning him the highest Insider Rating for the time period according to the Washington Service.  It’s even more puzzling considering that after a long and ostensibly thorough CEO search, BK selected  a new CEO, Charles Shcarf,, who purchased $10 million worth of stock in August. Mr. Scharf was most recently Chief Executive Officer and a Director of Visa Inc. from October 2012 through December 2016 and was recognized for transforming the firm into a technology-driven digital commerce company. Go figure. Maybe Peltz is just taking profits but it was one of the largest insider sales of the week.

Marvel Tech MRVL  The semiconductor sector has been on fire this year so it’s no wonder anyone would take profits but this is an unusual selling pattern. Marvel posted an unimpressive Q2 with revenue actually declining year over year.  This is also the most insider selling in a year. I wouldn’t be surprised to see another disappointing quarter when the Company reports  November 16th after the market close. We are most likely going to short into earnings.

Phillip Morris International PM  Chairman and former CEO Camilleri sold $11.8 million worth of stock at $108.38. I’d unload too as the momentum seems to be with sellers and PM could lose all of its gains for 2016. Besides the product is lethal, why would you want to root for it? We are short PM.

General Motors GM  If you didn’t know what they did, you would think that GM had invented the electric car.  Well maybe they do have a long legacy here with the Chevy Volt but rumors have they are going to kill that car.  Perhaps the low multiple and low expectations have created a combustible stock price. GM’s stock has been on a tear, outperforming the S&P 500 by nearly 20% over the last 13 weeks and 9.28% over the last 4 weeks.  Perhaps its just profit taking but 3 insiders unloaded $19.3 million last week.

Covenant Transportation Group  CVTI  Chairman of the Board and CEO David Parker took profits with his $7.2 million sale last week at $28.27 per share.  Trucking is often viewed as a leading indicator so this may just be profit taking as the Company said conditions were improving in the last earnings conference call Oct 19th.

Pinnacle Financial Partners PNFM  5 insiders unloaded $8.8 million worth of stock last week.  This is the largest amount of selling in the bank holding company’s history. It’s also close to the all time high closing price of $69.10 reached back in June of this year.

Goldman Sachs GS two insiders sold $7.9 million worth of stock including President Harvey Schwarz sale of 25,000 shares at $245 reducing his holdings by 8.2%.  Ex CFO and current board member,  David Vinair, unloaded $25 million  of options with 6.7 years remaining on their life. That’s not a ringing endorsement unless you can print more of those stock options.