Three Big Buys – Four Bigger Sells
Not all trades make sense, but when insiders start making moves in the millions, you may want to pay attention. Here is your rundown of the lot.
$CLR, $GOGO, $VSI, $HLF, $NYT, $ALGN, $WAB
In this report, we examine stocks that C-level officers and directors bought and sold ending the week of June 1, 2018.
Insiders sell stock for many reasons, but they generally buy for just one – to make money. As a standard, we only look at material amounts of money, $100 thousand or more, as anything less could just be window dressing.
The bar is different with selling, because the natural state of management is to be sellers. This is because most companies provide significant amounts of management compensation packages as stock. Therefore, with selling, we analyze for unusual patterns, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52 week lows.
To learn more about our strategy, visit The Insiders Fund. We welcome your comments on our analysis.
Note: We may own positions, long or short, in any of these names but do not disclose that information nor give those positions extra emphasis in our reports.
This Week's Buys
Continental Resources (CLR)
The Inside Trade: Chairman and CEO Harold Hamm is at it again, buying $8.9 million worth of his company’s stock at $65.30 per share.
Hamm’s company, CLR, is the largest driller in the Bakken in North Dakota. Hamm is also a very astute buyer of his stock so it’s interesting to see him buy with oil prices and stock prices near recent highs.
Three years after the start of the global oil glut, crude oil prices are now rising and oil industry momentum is picking up. The shale oil fields of the Bakken stretch north from Montana and North Dakota into Canada. The region hosted some of the first stages of the shale oil revolution, but Bakken output peaked in late 2014, then fell off sharply as crude oil prices collapsed due to a worldwide glut.
Gogo Inc. (GOGO)
The Inside Trade: Director Townsend buys more of this perennial non-performer, ostensibly wasting $2.5 million at $5.06.
We’ve made a lot of money trading GOGO, but not holding it. Their stranglehold on the airborne Wi-Fi market is slipping through their hands. We’re not sure why insiders keep buying but we think it’s notable and took a stab at reloading this name.
Vitamin Shoppe (VSI)
The Inside Trade: Two insiders buy $251 thousand worth of stock in the beaten down vitamin store chain.
Amazon is crushing third-party online vitamin and supplement products vendors like GNC Holdings (GNC), Vitamin Shoppe (VSI), and Bodybuilding.com. Amazon remains the low-price leader in supplements, says Deutsche Bank.
This Week's Sells
Herbalife Nutrition (HLF)
The Inside Trade: Normally we don’t pay much attention to 10% shareholders but Carl Icahn unloading $552 million of stock, representing 23% of his holdings, is notable.
New York Times (NYT)
The Inside Trade: Mexico’s richest man and one of the world’s richest individuals, Carlos Slim, unloads 24% of his shares at prices close to 4 times what he paid in 2011. So much for the failing New York Times.
Align Technology (ALGN)
The Inside Trade: Seven insiders take advantage of all time high prices to unload $10.2 million worth of stock at prices between $313-$334. This makes the CEO’s purchase of 1500 shares at $233 look like a very timely trade.
Wabtec (WAB)
The Inside Trade: Four insiders sell $8.5 million of Wabtec.
Westinghouse Air Brake Technologies Corporation, doing business as Wabtec Corporation, provides technology-based equipment, systems, and services for the freight rail and passenger transit vehicle industries worldwide. This is the largest amount of insider selling in years.