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. This week we are omitting insider sales, in part because we don’t have the time but also its increasingly difficult to make money on the short side in this bull market.
$LC,$TH,$VECO,$PLSE,$APRN,$SYRS,$PSEC,$CL,$JOE,$RH,$VECO
Buying
Lending Club LC Lending Club’s largest shareholder just dramatically upped the ante increasing his ownership in peer to peer Lending Club by 35.5% by purchasing 21.9 million shares at $3.90.
A dozen years ago, the largest internet company in China wasn’t Alibaba or Tencent, but game developer Shanda Interactive Entertainment Ltd. Its founder was a young man named Chen Tianqiao, who had become a billionaire at 30.
Chen was more prominent than Alibaba’s Jack Ma for much of the last decade — then he disappeared. He left China, dropping out of public view almost completely. He took his Nasdaq-listed company private in 2012.
Chen has investments in more than 100 Chinese technology companies. Ironically Dianrong is a online marketplace headquartered in Shanghai. It’s called the Lending Club of China. Lending Club cratered 50% when it reported 3rd quarter earnings 11-8-17. Growth has slowed. Can Chen bring back the Shanda magic? He’s putting his cash where his mouth is, buying a lot of stock at depressed presses. I like this one and we may stake out a position. More research is needed.
Pulse Biosciences Inc. PLSE – Two large purchases by chairman William Duggan of 20.5K shares at $22.44 and also director Maky Zanganeh of 5.1K shares. Pulse is a development-stage medical device company using a novel and proprietary platform technology called Nano-Pulse Stimulation (NPS). Our Technology. The NPS pulses are applied directly to tissue, creating a transient opening of small pores in cell and organelle membranes. Duggan has been buying stock since February of 2017. He has conviction having bought $35.9 milllion when it swooned recently sweeping up shares for an average price of $14.91. It pays to have conviction. There have been numerous articles on Seeking Alpha alleging price manipulation. We are researching this further.
Blue Apron Holdings Inc. APRN – CEO Brad Dickerson purchases 180K shares at an average price of $3.93. He is accompanied by Vice President Timothy Smith who bought 25K shares at $3.89.Before joining Blue Apron, Brad spent eleven years at Under Armour, Inc., most recently serving as chief financial officer from 2008 to 2016. This is the first insider buy by CEO Dickerson. He has been with the company since February 2016 and recently replaced co founder Matt Salzberg as CEO. I think the market will take a wait and see attitude on this recently disappoiting IPO.
Syros Pharmaceuticals (SYRS) – Director Akkaraju Srinivas made $1MM purchase after the stock cratered after a presentation at teh ASH 2017 conference. This should put a temporary floor on the stock. Syros is biotech development company.
Prospect Capital Corp. PSEC – Insiders continue to buy large dollar amounts of this middle market lender. PSEC has 10.56% dividend yield. It’s been a poor performer but this raft of insider buying might inspire some confidence in the Company. Rates have been shrinking for all of these mezzanine lenders. As rates rise, perhaps they can do better in replacing maturing deals.
Discovery Communications Inc. DISCK- Directors and insiders continue to add to their losing position in discovery communications. The sector is heating up and recent insider buys are very profitable. It pays to have conviction. I have often said the market is all about people with conviction taking money from people that lack it.
CenturyLink Inc. CL Insiders are beginning to buy CenturyLink after a multi-year low, stay tuned for more information.
St. Joe Company JOE In addition to Bruce Berkowitz’s purchase, there is in addition a director, Frank Howard, who purchased 20,000 shares for $379.5K.
Restoration Hardware RH Chairman of the Board Friedman is not timid about buying Restoration Hardware, he has scooped up 2$ million shares at $71.29 on August 14-26 only to buys $ 1 million more after reaching a lifetime high. Ballsy or shrewd, time will Tell but $3 million isn’t pocket change.
Veco Instruments VECO Veeco announces $100M common stock buyback. Veeco Instruments announced around the time it disappointed Wall St with earnings. CB Peeler bought 36,200 shares at $13.81 on this pullback. Semiconductors are hot, not sure why Veco is making new lows but we are investigating this one further. For now our toe is in the water.
