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PLx Pharma Inc. up 50.51%
Party City Holdco Inc. up 22%
FLEXSTEEL INDUSTRIES INC up 16.34%
COTY Inc up 14.66%
Pandion Therapeutics Inc. up 14.29%plxp
CASI Pharmaceuticals up 12.75%
StarTek Inc. UP 12.54%
ZOGENIX Inc up 7.10%
CHIASMA INC up 6.39%
Biohaven Pharmaceutical Holding Co Ltd. up 2.02%
SAFETY INSURANCE GROUP INC up 0.39%
DANAHER CORP down 4.14%
Just a heads up, the Insiders Fund Not so Daily Digest will be moving to a subscription-based model in the near future. It will always be free of course for investors in The Insiders Fund, which is up a stunning 42% this November alone. No less than six biotechs and one life science buy last week capped what I think will be one of the most profitable investment themes of 2021. Technology will be remembered as the best investment sector of 2020 as working remote, shopping remote, and even living remotely through Zoom`was the order of the day. 2021 will be the year of the vaccine and how bioscience restored our world and literally saved humanity. It’s very hard to analyze the science behind biotech investments, even for the most knowledgeable of investors. This is why we put more significance on insider activity and management pedigree.
Casi stands out. This under the radar name has both massive insider buying and pedigree management.
CEO Wei-Wu He bought 227,471 shares of Casi Pharmaceuticals at $2.15 per share. He also bought 4,1252,426 shares at $1.9 back in July. In fact, he has been a buyer of CASI since 2016 and has yet to sell a share. TDr. He has been Chairman of the Company since February 2012 and Executive Chairman since February 2018 and Chief Executive Officer since 2019. Prior to joining CASI, Dr. He was the CEO of OriGene Technologies, Inc. and remains Chairman of the Board of Directors. He also is the founder and General Partner of Emerging Technology Partners, LLC (ETP), a life sciences focused venture fund established since 2000. Dr. He has been involved in founding or funding over 60 biotech companies throughout his career, some of which went on to be acquired by significantly larger firms. In the earlier part of his career, Dr. He was one of the first few scientists at Human Genome Sciences, and prior to that, was a research fellow at Massachusetts General Hospital and Mayo Clinic. Dr. He is an author to more than 30 research publications and inventor of over 32 issued patents. Dr. He received his Ph.D. in Molecular Biology from Baylor College of Medicine and received an M.B.A. degree from the Wharton School.
t’s President, Mr. Zhang joined CASI Pharmaceuticals in September 2018 as President of CASI Pharmaceuticals (Beijing) Co., Ltd., which is a subsidiary of CASI Pharmaceuticals, and became President of CASI Pharmaceuticals in September 2019. Mr. Zhang has more than 20 years of management experience in the healthcare and biopharmaceutical industries in the U.S., Asia Pacific, and China. Prior to joining CASI’s Beijing office, Mr. Zhang was Vice President, Head of Public Affairs and Corporate Responsibility at Novartis Group (China), where he focused on the public affairs/public relations strategy, including initiating Novartis’ China policy focusing on China FDA (NMPA) new drug approval reform, intellectual property protection, generic quality consistency evaluation and new regulations on biosimilars. From 2011-2016, he was Chief Executive Officer of Sandoz Pharmaceutical (China), a Novartis Company. Mr. Zhang has also held executive leadership roles with Bayer Healthcare and Baxter International Corporation in the U.S. and Asia Pacific. He holds bachelor and master degrees in nuclear physics from the University of Science & Technology of China, an MBA in marketing/finance from the University of California at Los Angeles (UCLA), and received Ph.D. training in political science from University of Utah.
CASI is dedicated to the development and delivery of high-quality pharmaceutical products and innovative therapeutics to patients worldwide while targeting the China market. CASI has built a fully integrated, world-class biopharmaceutical company dedicated to the successful development and commercialization of innovative medicines. With over 100 employees in China and the U.S., CASI personnel are trained in global operations and have extensive expertise in U.S./China clinical, regulatory and commercial requirements and standards. The Company says it intends to execute our plan to become the leading platform to launch medicines in the greater China market leveraging our China-based regulatory and commercial competencies and our global drug development expertise. I think CASI has blockbuster potential combining what could be two of the hottest investment themes of 2021, biotech, and China.
Chairman Valentino bought 264,900 shares of PLx Pharma Int $3.79. The only problem was this stock never traded for this price. It opened at $4.89 and closed at $5.15. Plus there were some warrants involved or so it seems. It’s all very confusing but regardless the stock has been on a tear, rising from $3 area to its current Friday close of $5.70.
PLx Pharma Inc. (Nasdaq: PLXP), is a late-stage specialty pharmaceutical company initially focused on developing its clinically validated and patent-protected PLxGuard delivery system to provide safer and more effective aspirin products. PLx’s FDA-approved lead product, Vazalore 325 mg, is a novel formulation of aspirin that utilizes the PLxGuard delivery system to reduce acute GI side effects while providing superior antiplatelet effectiveness for cardiovascular disease prevention as compared with the current standard of care, enteric-coated aspirin.
Director Becker bought a hefty amount of Pandion Therapeutics with his purchase of 197,716 shares of PAND at $15.12 and 29,294 shares at $15.29. This is a hedge fund buy so you have to be a little circumspect about how much of this is Becker’s own skin in the game. He disclaims beneficial ownership in the filings but it’s complicated as usual.
Pandion Therapeutics is a biotechnology company developing bispecific antibody therapeutics to achieve localized immunomodulation at the site of disease for durable, tissue-specific treatment while avoiding the systemic immunosuppression of conventional medicine. PAND looks like it went public in July of this year at $18 and has been trading in a range since then. Insiders including Glaxo and Roche bought some more shares on the IPO and already listed as 10% owners. This is one to watch when insiders come back to buy below the IPO price and there has been no selling.
The management team is composed of proven veteran scientist entrepreneurs and the advisory board is a whos who of standouts in a field already filled with standouts. Pandion has blockbuster potential as its exploring novel approaches to large autoimmune markets. It’s first target, Colitis, though, is years away if ever. Pandion is very early-stage biotech and it’s challenging to see where the catalysts will come from as it will be years and years before any drugs make it through the regulatory hurdles. Investments and buyouts, partnerships, and license deals will be the catalysts if any.
Director Childs is back for more at Biohaven Pharmaceuticals. This time he purchased 5,000 shares of BHVN at $89.55. His last purchase was in September 21 with 3,322 at $59.25 and 6,678 at $59 on 9-14-20. Normally we love this kind of insider buying, purchasing more shares on the way up instead of the way down. This signals business prospects are not only good but they are getting better. Unfortunately, his fellow directors snd insiders are painting a different picture, having sold over 100,000 shares during the same time period. We made a little money on BHVN and will be exiting our position on Monday.
Danaher Chairman Rales continues to add to his massive position in this medical giant. This time he purchased $6 Million of DHR near a 52 week high at $226.14. Ironically Danaher is the worst performing insider buy for the week, but the one we feel most comfortable loading up on. Rales didn’t get to be a billionaire by investing poorly. While other insiders are all selling stock or exercising stock options, Danaher Chairman of the Board continues to pay up for shares. His previous purchase of $23 Million worth of stock at $164.69 has done pretty well since he bought the shares in May. I’m generally not a fan of conglomerates but it’s hard to argue with the success Rales has had. When someone with a track record such as his, is willing to invest millions into a company he already has a billion or more dollars in, well- when was the last time you saw Bill Gates buying Microsoft? We are buyers, perhaps not long term investors but will hitch a ride on Rales coat tails. It has worked well in the past and life sciences and environmental sustainability are our main investment themes for 2021.
Danaher is kind of modern-day successful version of what GE was. The company had its origins as a real estate investment trust (DMG, Inc., founded in 1969 and renamed Diversified Mortgage Investors, Inc. in 1978). But after adopting a new name in 1984, refocusing on manufacturing and being exposed to kaizen, the Japanese business philosophy of continuous improvement, Danaher began to take shape. Danaher was one of the first companies in North America to adopt kaizen. The practice led to the development of the Danaher Business System and continues to guide the culture, at the heart of the company’s five core values.
Today, Danaher is a global science and technology innovator committed to helping customers solve complex challenges and improving quality of life around the world. Our trusted brands hold unparalleled leadership positions in diagnostics, life sciences, and environmental and applied solutions. With more than 20 operating companies, our globally diverse team of 59,000 associates is united by a shared purpose: to help realize life’s potential.
Furniture maker, Flexsteel Industries has been on a tear. It pulled back briefly after its post 3rd quarter earnings run and insider CFO Schmidt jumped on it with 11,135 shares at $25.46. I grew up trout fishing in Savannah, Ga and this one reminds me of the fish feeding. We will be all over this name on any pullbacks. They are very brief as Schmidt just demonstrated. The stock is up 16% from where he bought it last week. FLXS is a buy at $25. I doubt if you’ll see that price again this year as new home construction starts were just reported, up 60% year over year.
Hedge fund operator and 10% Owner Clifford Sosin has been piling into Party City and has been rewarded for it. His latest purchase of 1,600,00- shares at $4 is up 22% for the week. I guess we should have seen this one coming as post-pandemic lets party like it’s the roaring 20’s all over again. Is there room left to party at PRTY? Party is down substantially from a high of $12 in February of 2019. PRTY woes though have more to do with online sales replacing brick and mortar than a pandemic-related shutdown. I guess it doesn’t matter what we think since the stock is up 22% but I wouldn’t be a buyer.
COTY, COTY, what do insiders see here? They have been on a roller coast ride in this name, probably losing far more money than they have made but it attracts them again and again. Last week alone we had Director Singer buying 17,500 shares at $7.14, Dir Goudet buying 50,000 shares at $7.10, Singer buying 5000 at $7.25, Director Parize buying 10,000 at $6.13, Director Hutch buying 1,000,000 at $6.19.
Coty Inc. is an American multinational beauty company founded in 1904 by François Coty. With its subsidiaries, it develops, manufactures, markets, and distributes fragrances, cosmetics, skincare, nail care, and both professional and retail hair care products. Coty owns around 77 brands as of 2018. It has been struggling under the disastrous purchase of P&G beauty business and then the pandemic hit. One thing for sure though is that when people start to go out again, makeup sales will soar. Coty just took on too much debt to soar with it. We love the idea of the party is on and we own a lot of Smile Direct. We will buy some COTY on a dip but we are not getting married to the name without a better balance sheet.
Dir Rao bought 206,814 shares of StarTek at $7.02. He also purchased $2 million worth of SRT back in May. Rao disclaims beneficial ownership and it seems this is a hedge fund transaction. Normally we don’t write about these but it’s good to remind our readers not to fall victim to people investing other people’s money. It’s just not the same as a CFO ponying up hundreds of thousands of dollars to buy his company’s stock.
Startek is a leading global provider of technology-enabled business process outsourcing solutions. The company provides omni-channel customer experience management, back office and technology services to corporations around the world across a range of industries. The company has more than 45,000 outsourcing experts across 54 delivery campuses worldwide that are committed to delivering transformative customer experience for clients. Services include omni-channel customer care, customer acquisition, order processing, technical support, receivables management and analytics through automation, voice, chat, email, social media
It’s not immediately apparent to me what SRS is about. At first glance, it looks like an IT Indian-based outsourcing company trying to pivot to the cloud with an emphasis on CX, the customer experience, and the STAR cloud. The stock has done nothing for investors in almost 20 years so not sure why it will work now. Upon further analysis
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Insiders sell stock for many reasons, but they generally buy for just one – to make money. You’ve always heard the best information is inside information. Everyone who has any experience at all in the stock market pays close attention to what insiders are doing. After all, who knows a business better than the people running it? Officers, directors, and 10% owners are required to inform the public through a Form 4 Filing any transaction, buy, sell, exercise, or any other with 48 hours of doing so. This info is available for free from the SEC’s Web site, Edgar, although we subscribe to SECForm4 as they provide a way to manage and make sense of the vast realms of data. I’ve tried a lot of vendors and SECForm4 is one of the most customer friendly and responsive I’ve used. This is as close to “insider information” that an ordinary investor is likely to see- and it’s entirely legal.
BEWARE– Following insiders can be hazardous to your financial health unless you know what you are doing. Unlike the raw, unfiltered data, The Insiders Fund blog informs you of the purchases that count, the ones that are just window dressing into deceiving the public that all is hunky dory, and those that are just flat out other people’s money and should be just discarded like bad fish. 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 and options. 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. Also planned sales that just pop up out of nowhere are basically sales and are seeking cover under the Sarbanes Oxley corporate welfare clause. 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. Don’t let anyone fool you into believe they never make mistakes. No one tracks and understands insider behavior better than us. We’ve been doing it religiously since 2001, when I quit being an insider myself and devoted myself full time to managing my personal investments. 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. THE INSIDERS FUND invests in companies at or near prices that management has been willing to invest significant amounts of their own money in. 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
The Insiders Fund was the 4th best long-short equity fund in the world in 2019
