It was a dull week on insider buying, the week before. Last week would make you think it was a crime to buy your own company’s stock. Of course, we are in the throes of the 1st quarter earnings blackout, but insiders still find ways to unload their holdings though.
Buys
WBA Walgreens Boots Alliance-Walgreens Boots Alliance Q2 ‘was a very disappointing quarter for us’ according to management’s earnings conference call. The stock was pummeled with numerous analyst downgrades. The stock got cheap enough for the COO, to pull the trigger and bought $1 million worth of WBA at $54.58. We are taking this lay-up but can’t stay we will stay here for long.
Rev Revlon Chairman of the Board, Perlman continues to pour money into the cosmetics giant. He purchased two lots, one for $2.34 million at $20.22, the other one of $1.4 million at $21.10.
COST Costco Wholesale A director bought 3000 shares near a 52 week high at $242.85. It’s hard to put a lot of conviction into this purchase even though it was a sizeable amount, $727k. Buying market darlings at 52 week highs is not your typical MO for an insider.
RMBL Rumble On Dir Dixon bought 50,415 at $4.77 of this motorcycle marketplace. We are doing more research on this name but it looks interesting. We are trying to figure out where Ebay Marketplace and Carvana’s success could transfer to this name.
Not much of interest here either. Insiders continue to unload stock using the Rule 10b5-1 loophole that allows insiders to sell stock right through any imposed earnings blackout period. It’s hard to read anything much into these sales other than the fact, that I would rather see insiders buying than selling their stock. The timing of these transactions shed little light on short term price movements, though.
In this report, we examined open market purchases from employees and directors. 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 from 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 is 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.