Buys
TSLA Tesla Inc. Elon Musk backs up his bravado with his pocket-book, buying $30 million worth of Tesla stock at an average price of $347.75. One though does have to wonder about the sources of Musk’s funds as he never sells stock, only buys it and takes no salary. This is reminiscent of bad experiences investors had with Audrey McClendon of Chesapeake Energy. At some point, the money runs out. Is Elon buying on margin? If so this can lead to a dangerous downward price decline in times of turmoil.
AMH American Homes 4 Rent .Chairman of the Board Gustavson adds $20.18 million to his holdings at an average price of $20.18. 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.
PAH Platform Specialty Products Corp Director Ashken bought 122,000 shares at an average price of $10.97. Ashken has been buying stock since 2014 and has yet to see a return on his investment in this specialty chemical company. We don’t see any reason why this time will be different.
CHDN Churchill Downs Inc. Director Ducshossis is at it again. He purchased $2.5 million at average prices of $271.92. Home of the Kentucky Derby, Churchill Downs has been expanding, the most recent, a majority stake in Rivers Casino Des Plaines, Illinois.
CSV Carriage Services Funeral company Director Paynes took advantage of an 18.4% drop in share price due to an earnings shortfall and purchased $2.5 million worth of stock at an average prices of $16.29
PFG Principal Financial Group Director Gelatt bought $1.2 million at an average price of $48.10 on 11/5/18. This is his largest purchase of stock in the insurance giant since his timely buy of 120,000 shares at $9.89 during the heights of the financial recession November 2008.
ASGN Inc ASGN Dir Callaghan bought 15,000 shares at $68.03 when large staffing company ASNG plummeted 20.9% on a 3rd quarter earnings miss.
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.
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.