The Few but the Strong: Big Trades at the Quarter’s Close
The close of every quarter tends to stem insider trade volume as companies enter blackout periods. However, that doesn’t stop insiders with conviction. With few but significant buys and some significant sells, we expect volume to increase soon but don’t want to discount the importance of trades that did happen. Here are the insider trades that should be on your radar.
$TSLA, $MELI, $GNE, $IFF, $CARG, $PII
METHODOLGY
In this report, we examine stocks that C-level officers and directors bought and sold throughout the week ending June 15,2018.
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.
Another red flag are large planned sale programs that start without warning. We generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and not the SMART money we are trying to go to school on. We also exempt IPOs and secondaries for a variety of reasons from not being available to the public or more nefarious reasons like trying to provide support for additional fund raising.
Although this info is available for free from the SEC’s Website , Edgar, we subscribe to the Washington Service as they provide a way to manage and make sense of the vast realms of data. Credit for charts goes to yahoo.com
To learn more about our strategy, visit our website at The Insiders Fund. We welcome your comments on our analysis.
NOTE: We may own positions, long or short, in any of these names and are under no obligation to disclose that.
This Week's Buys
Tesla (TSLA)
The Inside Trade: Elon Musk is at it again. He bought 72,500 shares at an average price $343.78. That makes it the largest insider buy of the week according to our methodology, which excludes hedge funds &money managers (basically other people’s money).
I don’t think Elon has ever lost money buying Tesla stock and I doubt if this buy will be any different. Tesla has been waging a war with some of the smartest short selling hedge funds for some time. Score Elon 5 – Hedge Funds 0.
Mercado Libre (MELI)
The Inside Trade: Meyer Malka made a $15 million buy, paying an average $298.89 per share.
Insiders are getting aggressive, as Malka follow ups his May purchase of $500 thousand worth of stock in this Latin American Ebay.
Genie (GNE)
The Inside Trade: Chairman Jones buys $4.34 million worth of this small $124 million market cap E&P play.
I doubt if we will buy a company this small.
International Flavors and Fragrances (IFF)
The Inside Trade: Director Morrison buys $500,000 worth of stock at an average price of $124.80.
Like many of the consumer staple stocks, IFF is struggling with growth and rising commodity costs. Morrison picked up shares near the bottom of the 52 week range.
This Week's Sells
Car Gurus Inc (CARG)
The Inside Trade: Six insiders unloaded $165.3 million.
This week continues a notable inside selling string of the online car vendor.
Polaris Industries (PII)
The Inside Trade: 4 insiders sold $8.4 million worth of stock as PII approaches a 52 week high.
Insider Trade Report Card
Each week we identify significant insider trades, but were those insiders onto something?
This report card checks up on those trades and displays how prices have changed in the week since their insider’s trade.
On this report card, we show the performance of insider trades we deemed as significant in our report from the week ending June 8, 2018. Here is how the trades have done so far.
