They say we are in a war with Covid-19. Like most wars there is a lack of quality information. We look closely at insiders to gauge the health of corporate America. There is this narrative that insiders are buyer. That’s a false narrative. I don’t see it. Maybe it’s earnings blackout, maybe it’s the sharp off the bottom rally since March 25th, or maybe they are just deer frozen in the headlights like the rest of us. You decide. PICK OF THE WEEK Carnival Cruise Lines
Thursday April 9th 2020
SMPL Simply Good Foods Dir Ghez bought 30,000 at $16.32. This is the remake of the old Atkins diet food company.
Monday April 6th 2020
CCL Carnival Cruise Lines Director Weisenburger bought 1,250,000 at $8 per share. Do you think he knew the Saudi’s were going to buy an 8.2% stake in the company. Carnival surges 27%, extends 2-day surge to 53%, after Saudi …
Friday April 3rd 2020
MGM MGM Resorts International. Dir Salem continued his buying spree with a $10M purchase at $8. It closed on Thursday at $14.55 after opening at $16.24 that day. Readers of our blog might recall this was our pick of the week last week in our blog post .
SAIC Science Application CEO Keene scooped up 14,300 shares at $70.75 for $1M. SAIC. SAIC® is a premier technology integrator serving mostly government markets. We would have traded this but the stock was quite a bit higher by the time this info broke.
Filed late – President Kong bought $5.8M of Temir Corp TMRR at $14.10 per share back on Mar. 30th. Temir Corp is a microcap travel agency based in Kyrgystan whose President Kong, is based in Hong Kong. I kid you not.
As a rule, 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. Unfortunately, the public information disclosure requirements about these programs referred to as Rule 10b5-1 is horrendously poor. I also generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and perhaps not the smart money we are trying to read the tea leaves on.
Of course insiders can also be wrong about their Company’s prospects. They can easily be wrong about how much others will value them, and in many cases, maybe most cases have no more idea what the future may hold than you or I. In short, you can lose money following them. We have and we curse aloud, what were they thinking! Needless to say, past good fortune is no guarantee of future success. We may own positions, long or short, in any of these names and are under no obligation to disclose that. We welcome your comments on our analysis.
This blog is solely for educational purposes and the author’s own amusement. Investing with The Insiders Fund is for qualified investors and by Prospectus only. Nothing herein should be construed otherwise. To learn more about our strategy, visit our website. If you would like to hear more about how you can get involved with the Insiders Fund, please schedule some time on my calendar.
Prosperous Trading,
Harvey Sax
