As the market has sold off, insiders are starting to take advantage of lower prices. Take note of this graph supplied by the Washington Service.
Buys
ET Energy Transfer LP Pipeline behemoth ET recently ended their two class share structure of general partner and limited partners consolidating the company into one entity, ET. Insiders have been steady buyers. Director Ray Davids purchased $5.0 million at an average price of $15.80. With a yield over 8% its not hard to understand what CB Kelcy saw when he purchased $31.million additional stock at an average price of $15.55.
AMH American Homes 4 Rent .Chairman of the Board Gustavson adds $33.5 million to his holdings at an average price of $20.22. Wonder where all the affordable single family housing is going? AMH and other funds have been buying single family homes up and renting them out since the financial crisis.
COTY Coty new CEO Pierre Laubies bought $20.1 million of this depressed beauty products giant. Coty has been under a steady decline since its disastrous purchase of P&G beauty business. For the sake of the employees and shareholders, I hope this new CEO can make a difference. We have a small position but are not adding to it until we see some positive traction.
APD Air Products and Chemicals CEO Ghasemi bought $3.2 million worth at an average price of $160.11. We love this kind of aggressive purchase and in a up trending market we would be all over this for a trade. We are not committing as we just don’t see the compelling valuation that would entice us to buy APD.
GEO GEO Group Chairman Zolev bought $2.7 million of this private prison contractor at $22.45. We are accumulating a small position in this high yield stock with a 8.36% dividend yield.
COMM CommScope Holdings Co. Six insiders bought $1.6 million of stock from prices ranging from $18.60-$19.60, the largest being CFO Pease’s purchase of 40,000 shares at $18.70. As a rule, CFO buys are on of our favorites. Our thinking is that the CFO is a more cautious creature by nature and of course knows the books as well if not better than anyone. CommScope tanked on numerous analyst downgrades. BofA/Merrill downgraded CommScope (COMM) to Neutral citing weak results and concerns around the Arris (ARRS) acquisition due to leverage and execution concerns.
SUP Superior Industries Six insiders bought $1.2 million of stock last week, the largest buy was again the CFO. Masanovich bought 50,000 shares at $8.02. Superior is one of the largest aluminum wheel manufacturers. SUP is trading at a 5 year low so owning this name will require some patience but the reward could be great.
Athenix ATNX Six insiders bought $817 thousand worth of this small biotech. CEO and Chairman of the Board bought 40,000 shares of ATNX on 11/14/2018 at an average price of $10.47 a share. The total cost of this purchase was $418,800.
ECA Encana insiders bought $1.4 million worth of stock last week. Insiders have really stepped and bought this large natural gas driller as E&P stocks plunged. To add insult to injury the stock accelerated on the downside when they announced the driller’s $5.5 billion purchase of Newfield Exploration Co.
PRTY Party City Holdco Inc. Party City insiders must like the prospects of their company as four insiders bought $1.2 million worth of stock at an average prices of $7.72-$8.65. We would be more enthused about this “value” buy if the company wasn’t so debt encumbered.
VSM Versum Materials Versum Materials, Inc. develops, manufactures, transports, and handles specialty materials for the semiconductor and display industries . Chairman of the Board, Harrison, bought 20,000 shares at $33.41.
WLKP Westlake Chemicals CEO Chao bought $410 thousand dollars worth of stock at an average price of $23.32. Westlake Chemical Partners LP operates, acquires, and develops ethylene production facilities and related assets in the United States.
Sales
Nothing too out of the ordinary showed up last week in sales. It’s become increasingly difficult to read the tea leaves regarding the $ millions of dollars of sales every week due to the proliferation of the Sarbanes Oxley era loophole of 10b5-1 trading plans.
ZBRA Zebra Technologies Director sold out of almost all of his stock with his sale of 34,000 shares at $178.14. The last time he purchased shares was November 2009 at $27.12. Thats a major return and one can hardly blame him for taking profits. Two vice presidents sold stock as well as the CEO exercising stock options.
NEO Neogenics Four insiders sold $74 million worth of stock including shareholder, General Electric. Neogenics received several upgrades earlier in the month on better than expected earnings and revenue growth.
In this report, we examined open market purchases from employees and directors ending the week of October 5 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, $200 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. 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 of the vast realms of data.
To learn more about our strategy, visit our website here. 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.