The Bold, the Inexplicable and the Good Soldiers- Insider Buying Week 9-17-21

For trade, details click on this link to the trades. 

There were quite a few buys last week and it took me longer than usual to update it. Also, I will provide a brief recap of the conversation I had with the Chief Medical Officer, Alexander A. Zukiwski at Casi Pharmaceuticals. Casi is a U.S. NASDAQ-listed biotech selling exclusively to the increasingly affluent Chinese middle class.  CASI is a penny stock that will turn into $dollars if things pan out the way I think. They have one approved revenue-producing product with an exciting pipeline. There is a high probability they will have a CAR-T blood cancer approval in 2022.  Dr. Zukiwski shared some eye-opening insights about the Chinese market, their pipeline, and the iconic CEO who has bought over $32 million of stock during the last seven years. I will share those as promised at the end but first, the buys last week that could make a difference.

Several of our buys this week are in the oil and gas sector and electricity production industry. Normally I look at insider buying as idiosyncratic one-off situations but when multiple insiders are buying in the same sector, that’s a signal that there is a macro call here too. I think Enterprise Products Partners, Energy Transfer, NGL Energy Partners, Continental Resources, and even AES Corp all are broadcasting something as clear as the nose on your face.

I’m more convinced than ever that ESG investing and the effort to reduce carbon emissions have created an enormous cognitive dissonance. The political will to combat climate change by legislating is far behind the investment’s community fascination with renewable energy sources and light-years behind the will of the people to get off the fossil fuel teet.  People don’t choose to use fossil fuels as they do flipping through Netflix or social media.  People use fossil fuels because they don’t want to live in the stone age.

You could give everyone; not let me be bolder; ban combustion engine vehicles and instead force the use of electric vehicles and yes, that would cut down some on transportation-caused carbon emissions.  But when you push hard here, you get a reaction somewhere else.

Transportation caused 29 percent of 2019 greenhouse gas emissions according to the EPA. The transportation sector generates the largest share of greenhouse gas emissions. Greenhouse gas emissions from transportation primarily come from burning fossil fuel for our cars, trucks, ships, trains, and planes. Over 90 percent of the fuel used for transportation is petroleum-based, which includes primarily gasoline and diesel.

Push hard here and you get a tremendous demand-pull on electricity generation.  Electricity production generates the second-largest share of greenhouse gas emissions. Approximately 62 percent of our electricity comes from burning fossil fuels, mostly coal and natural gas.  There is something that could be done to increase renewables and reduce the use of fossil fuel but they all have unique challenges. For example, hydroelectric is the largest source of renewable energy. It’s not likely we are going to find a new source of rivers and potential damns to build.  Even the ones we have were built 50 -to over 100 years ago and need substantial resources to maintain. The iconic 2-GW Hoover Dam and 1.3-GW Glen Canyon Dam hydropower plants are operating at substantially reduced capacity, paralyzed by enduring drought conditions across the West, the U.S. Bureau of Reclamation (USBR) has revealed.  At Lake Powell’s Glen Canyon Dam, which straddles the Arizona-Utah border, conditions were even graver. The lake is also at “the lowest level since being filled,” Manning said. That has resulted in a decrease of about 41% for Glen Canyon Dam’s generating capacity.

The sun doesn’t shine 24 hours a day and neither does the wind blow continuously but people demand a continuous, reliable source of power.  Utility-scale battery projects are one way of addressing that.  Vista Energy, under contract with PG&E, is lighting up the largest battery installation in the country.  Batteries today made from lithium, cobalt, and other materials have an environmental impact as well.

It will be much harder, perhaps impossible to live in a world on the road to Net Zero carbon emissions. Whether you want to own fossil fuel companies is another matter.  I just would say that I find it ironic that there is all this investment community sanctimonious behavior about fossil fuels causing climate change when new findings show that more than a third—34%—of all man-made greenhouse gas emissions are generated by food systems.  Is there a clamor to all become vegetarians?

Perhaps it’s inevitable that Governments will mandate getting off the fossil fuel teet but it won’t happen without a huge political fight. If you think mandating vaccination against Covid has been hard, you’ve not seen anything yet. There will be many years, many more years where fossil fuel usage continues to rise against the well-reasoned objections of scientists and concerned citizens.  During that time carbon capture technologies will get better, renewable advances will be made, and the world will continue to use fossil fuels

 

Name: Hamm Harold
Position: Director 10% Owner
Transaction Date: 2021-09-15 Shares Bought: 261,709 Average Price Paid: $41.99 Cost: $10,988,120
Company: Continental Resources Inc. (CLR)
Continental Resources (NYSE: CLR) is a Top 10 independent oil producer in the U.S. Lower 48 and a leader in America’s energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and one of the largest producers in the nation’s premier oil field, the Bakken of North Dakota and Montana. The Company also has leading positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the STACK and Northwest Cana plays. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and our nation’s leadership in the new world oil market. Continental Resources, Inc. explores for, develops, and produces crude oil and natural gas primarily in the north, south, and east regions of the United States. The company sells its crude oil and natural gas production to energy marketing companies, crude oil refining companies, and natural gas gathering and processing companies. As of December 31, 2020, its proved reserves were 1,104 million barrels of crude oil equivalent (MMBoe) with proved developed reserves of 627 MMBoe.

Growing up in rural Oklahoma, Mr. Hamm went to work in the oil fields as a teenager and established Continental Resources in 1967 at the age of 21. He built a grassroots startup into an NYSE-traded, Top 10 oil producer in the U.S. Lower 48. As a voice for America’s oil and natural gas industry and as the leader of one of America’s top E&P companies, he has helped to make America energy independent. Mr.Hamm also co-founded and serves as Chairman of the Domestic Energy Producers Alliance, which aims to preserve the millions of jobs and billions of dollars in economic activity and tax revenues generated by onshore drilling and production activities within the United States. Through his work with DEPA, Mr. Hamm is widely recognized as the man who led the charge to lift America’s 40-year-old ban on U.S. crude oil exports.

Opinion: The curious case of Harold Hamm, the perennial oil bull.  Harold always buys his stock.  In fact, since 2017 Harold has made 21 significant purchases of  Continental Resources and only one sale on 12-17-19 of 1,779,496 shares at $33.87 per share raising $60.28 Million.  That’s a net $253 million of stock he has bought.  Where does Harold Hamm get all the money to do this? His salary 2021 annual salary of $12.7 million doesn’t support anything like this.

I think it’s a fair question after Aubrey McClendon’s undisclosed loans from Goldman Sachs and others to buy his stock, Chesapeake Energy.  Continental Resources and Chesapeake share a lot in common in that their CEOs were both celebrated spokesmen for the oil and gas industry.  Except Aubrey turned out to be a scandalous character.  His story has never really been adequately told in my opinion as his death ended the investigation.  The deadly crash on March 2, 2016, occurred one day after Mr. McClendon was indicted on a single count of conspiring to rig the price of oil and gas leases. The U.S. Justice Department dropped that charge in the wake of Mr. McClendon’s death.

The reason I bring this up is I remember calling Chesapeake Energy and asking them the same question before the infamous meltdown in the crash of 2008/2009. Where does Aubrey get the money? “Oh the IR department falsely reassured me that Aubrey has lots of money. As it turns out he was pledging his stock on margin to buy more of it and when the market collapsed he was sold out, further crashing the stock and hurting many small investors including myself.

To buy more Chesapeake stock, McClendon borrowed money from his brokers – what’s called “buying on margin.” In October 2008, just after the financial crisis erupted with the bankruptcy of Lehman Brothers, he was forced to sell more than 31 million Chesapeake shares for $569 million to cover margin calls from those brokers. The company’s stock fell nearly 40 percent the week of McClendon’s share sales. McClendon issued an apology but the damage was done.

So I think it’s a fair question. Where does Harold Hamm get all the money to buy his Company’s stock, CLR?

https://www.wsj.com/articles/crash-that-killed-aubrey-mcclendon-was-accident-1465401918

Name: Rutherford John R
Position: Director
Transaction Date: 2021-09-15  Shares Bought: 10,000 Average Price Paid: $22.24 Cost: $222,377
Company: Enterprise Products Partners L.P. (EPD)
Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services. It operates 21 natural gas processing facilities in Colorado, Louisiana, Mississippi, New Mexico, Texas, and Wyoming; NGL pipelines; NGL fractionation facilities; NGL and related product storage facilities; and NGL marine terminals. The Crude Oil Pipelines & Services segment operates crude oil pipelines; and crude oil storage and marine terminals, including a fleet of 310 tractor-trailer tank trucks used to transport liquefied petroleum gas. It also engages in crude oil marketing activities. The Natural Gas Pipelines & Services segment operates natural gas pipeline systems to gather, treat, and transport natural gas. It leases underground salt dome natural gas storage facilities in Napoleonville, Louisiana; owns an underground salt dome storage cavern in Wharton County, Texas; and markets natural gas. The Petrochemical & Refined Products Services segment operates propylene fractionation and related marketing activities; butane isomerization complex and related deisobutanizer units; and octane enhancement and high purity isobutylene production facilities. It also operates refined products pipelines and terminals; and ethylene export terminals, and provides refined products marketing and marine transportation services. The company was founded in 1968 and is headquartered in Houston, Texas.

Mr. Rutherford was elected as a director of Enterprise GP in January 2019 and is a member of its Audit and Conflicts Committee. He is a Senior Managing Director of NRI Energy Partners LLC. This firm evaluates and invests in private and public energy companies and provides financial and strategic consulting services to energy companies and investment firms.  His career includes over 20 years of investment banking experience as mergers and acquisitions and strategic advisor to public and private energy companies, investment firms, management teams, and boards of directors. Before joining Plains, Mr. Rutherford served as Managing Director of the North American Energy Practice of Lazard Freres & Company from 2007 until 2010. Before joining Lazard, he was a partner at Simmons & Company for over ten years.

Opinion: I’m more convinced than ever that ESG investing and the war on hydrocarbons will create an enormous cognitive dissonance. The political will to combat climate change by legislating is far behind the investment’s community fascination with renewable energy sources.  I think EPD, ET, and perhaps the most enticing, NGL are back up the truck buys.

It will be much harder, perhaps impossible to live in a world on the road to Net Zero carbon emissions. Whether you want to own fossil fuel companies is another matter.  I just would say that I find it ironic that there is all this investment community sanctimonious behavior about fossil fuels causing climate change when new findings show that more than a third—34%—of all man-made greenhouse gas emissions are generated by food systems.  Is there a clamor to all become vegetarians?

Perhaps it’s inevitable that Governments will mandate getting off the fossil fuel teet but it won’t happen without it. There will be many years, many more years where fossil fuel usage continues to rise

Name: Krimbill H Michael
Position: CEO
Transaction Date: 2021-09-14  Shares Bought: 100,000 Average Price Paid: $1.74 Cost: $173,500
Company: NGL Energy Partners LP. (NGL)
NGL Energy Partners LP engages in the crude oil and liquids logistics and water solution businesses. The company’s Crude Oil Logistics segment purchases crude oil from producers and marketers and transports it to refineries for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs; and provides storage, terminaling, and pipeline transportation services. Its Water Solutions segment transports, treats, recycles and disposes of, produced, and flowed back water generated from oil and natural gas production; disposes solids, such as tank bottoms and drilling fluid and muds, as well as performs truck and frac tank washouts; and sells produced water for reuse and brackish non-potable water. The company’s Liquids Logistics segment supplies natural gas liquids, refined petroleum products, and biodiesel to commercial, retail, and industrial customers in the United States and Canada through its 28 terminals, third-party storage and terminal facilities, and standard carrier pipelines, as well as through a fleet of leased railcars. This segment is also involved in the marine export of butane through its facility in Chesapeake, Virginia, and offers terminaling and storage services. NGL Energy Holdings LLC serves as the general partner of the company. The company was founded in 1940 and is headquartered in Tulsa, Oklahoma.

Mr. Krimbill is Chief Executive Officer and also serves as a member of the Board of Directors. He has over 20 years of experience in executive roles in the propane industry. He was the past President and Chief Financial Officer of Energy Transfer Partners LP from 2004 through 2007. He was a former Director of Energy Transfer Equity, the General Partner of Energy Transfer Partners. At Heritage Propane Partners, the predecessor of Energy Transfer Partners, Mr. Krimbill, filled various roles from 1990 through 2004, including Chief Financial Officer and Chief Executive Officer. Mr. Krimbill served as a member of Williams’ Partners LP board from 2007 – 2012, where he was a member of the Audit Committee and the Chairman of the Conflicts Committee. He also served on the board of Pacific Commerce Bank from 2011-2015.

Opinion:  I wrote last week Morgan Stanley did an interesting podcast on Norway and how EV usage has soared there, more than anywhere else in Europe and yet hydrocarbon consumption still is on the rise there. It might lend some logic to the otherwise inscrutable, none more quixotically than NGR Partner’s CEO many purchase of NGL Partner.  Crimble, the CEO, has bought 1,140,000 million shares spending $7,134,034 during the last five years at ever-lower prices.  This last week he bought another 100,000 shares and is up  21% on that purchase.

 

Name: Brannon Richard D
Position: Director
Transaction Date: 2021-09-15  Shares Bought: 24,500 Average Price Paid: $9.33 Cost: $228,585
Company: Energy Transfer LP. (ET)
Energy Transfer is a Texas-based company that began in 1995 as a small intrastate natural gas pipeline operator and is now one of the largest and most diversified investment grade master limited partnerships in the United States—growing from roughly 200 miles of natural gas pipelines in 2002 to more than 86,000 miles of natural gas, natural gas liquids (NGLs), refined products, and crude oil pipelines. Today, there are three publicly traded partnerships in the Energy Transfer Family. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all major domestic production basins. ET is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate, and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; NGL fractionation; and various purchase and marketing assets. Et al. owns Lake Charles LNG Company. (NYSE: SUN) is a master limited partnership that distributes motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers, and distributors in more than 30 states. SUN’s general partner is Energy Transfer Operating, LP, a subsidiary of Energy Transfer LP (NYSE: ET). For more information, visit Sunoco LP.’s largest independent compression services providers in terms of total compression fleet horsepower. The Partnership partners with a broad customer base composed of producers, processors, gatherers, and natural gas and crude oil transporters. The Partnership focuses on providing

Mr. Brannon has served on the Board of Directors of Energy Transfer LP since March 2016. He is the CEO of CH4 Energy companies II, III, IV, V, and Six, all independent companies focused on horizontal oil and gas development. Mr. Brannon has served on the board of directors of WildHorse Resource Development Corporation (NYSE: WRD) since its IPO in December 2016. He formerly served on the boards and as a member of the audit, compensation, and conflicts committees of Sunoco LP, Regency Energy Partners, OEC Compression, and Cornerstone Natural Gas Corp. He has over 35 years of experience in the energy business, having started his career in 1981 with Texas Oil & Gas.

Opinion: The obvious sometimes is missed like the nose on your face when everyone is looking at your shoes.  Or something like that. Right now Wall Street is writing off hydrocarbons based on a future of Net Zero carbon commitments.

Name: VanWees Jason
Position: VP
Transaction Date: 2021-09-13 Shares Bought: 1,500 Average Price Paid: $426.00 Cost: $638,995
Company: Teledyne Technologies Inc. (TDY)
Teledyne Technologies Incorporated provides instrumentation, digital imaging, aerospace and defense electronics, and engineered systems in the United States, the United Kingdom, Canada, Denmark, France, the Netherlands, and internationally. The company’s Instrumentation segment offers monitoring and control instruments for marine, environmental, industrial, and other applications, as well as electronic test and measurement equipment; and power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission-critical and harsh environments. Its Digital Imaging segment provides image sensors and digital cameras for use in industrial, scientific, academic research, and medical applications; and hardware and software for image processing and automatic data collection in industrial, academic research, and medical applications, as well as manufacturing services for micro-electro-mechanical systems. This segment also offers light detection and ranging systems; focal plane arrays, sensors, and subsystems; and geospatial software products. The company’s Aerospace and Defense Electronics segment provides electronic components and subsystems, as well as communications products, such as defense electronics; environment interconnects; data acquisition and communications equipment for aircraft; components and subsystems for wireless and satellite communications; and general aviation batteries. Its Engineered Systems segment offers systems engineering and integration, technology development, and manufacturing solutions for defense, space, environmental, and energy applications; and designs and manufactures electrochemical energy systems and electronics for military applications. The company markets and sells its products and services through sales forces, third-party distributors, and commissioned sales representatives. Teledyne Technologies Incorporated was founded in 1960 and is headquartered in Thousand Oaks, California.

As of January 1, 2019, Jason VanWees is the Executive Vice President of Teledyne Technologies Incorporated. Mr. VanWees’ responsibilities include corporate strategy, acquisitions, and margin improvement programs. Mr. VanWees joined Teledyne in 1999. Since that time, Teledyne has acquired over 60 businesses and grown sales from $750 million to over $3.0​ billion. The acquired companies have participated in a number of markets including digital imaging sensors and cameras, test and measurement instrumentation, and electronic subsystems for energy, aerospace, and defense, and environmental applications. Before joining Teledyne, Mr. VanWees worked in the Investment Banking departments of Goldman, Sachs & Co., and Salomon Brothers Inc.

Opinion: TDY has been a big winner. Jason has eyes in a lot of places and he is on a buying spree.  The previous purchase in March for 3000 shares at $357.48 has paid off and likely he’s taking advantage of the recent pullback in an opportunistic buy. When insiders are buying near the top of the range, it likely says “business is good and it’s going to stay good or even get better.” TDY is one of the few names that is actually down on the week. Monday would be a good day to dip your toes in the water.

 

Name: Horgen Jay C
Position: CEO
Transaction Date: 2021-09-14  Shares Bought: 2,000 Average Price Paid: $158.01 Cost: $316,020
Company: Affiliated Managers Group Inc. (AMG)
Affiliated Managers Group, Inc. is an American international investment management company headquartered in West Palm Beach, Florida. that owns stakes in several boutique asset management, hedge fund, and specialized private equity firms. Through its affiliates, affiliated Managers Group, Inc. operates as an asset management company providing investment management services to mutual funds, institutional clients, and high net worth individuals in the United States. It provides advisory or sub-advisory services to mutual funds. These funds are distributed to retail and institutional clients directly and through intermediaries, including independent investment advisors, retirement plan sponsors broker-dealers, major fund marketplaces, and bank trust departments. The company also offers investment products in various investment styles in the institutional distribution channel, including small, small/mid, mid, and large-capitalization value and growth equity, and emerging markets. In addition, it offers quantitative, alternative, and fixed income products and manages assets for foundations and endowments, defined benefits, and defined contribution plans for corporations and municipalities. Affiliated Managers Group provides investment management or customized investment counseling and fiduciary services. The company was formed as a corporation under the laws of Delaware in 1993. Affiliated Managers Group is based in Prides Crossing, Massachusetts. They identify and partner with investment firms around the world specializing in actively managed investment strategies. The AMG Partnership Approach preserves each Affiliate’s essential elements of success, including operational and investment autonomy and direct equity ownership across successive generations of management, and provides access to the scale and resources of a global asset management firm.

Jay Horgen is the President and Chief Executive Officer of the Company. He joined AMG in 2007 as Executive Vice President in charge of the Company’s New Investments effort and became Chief Financial Officer in 2011 and President in 2019. Mr. Horgen was appointed as CEO and joined AMG’s Board of Directors in 2019. Before joining AMG, he founded a private equity firm, Eastside Partners, where he served as a managing director. From 1993 to 2005, Mr. Horgen focused on asset management as an investment banker in the Financial Institutions Groups of Merrill Lynch & Co., where he was a managing director, and Goldman, Sachs & Co.

Opinion: It’s always good when the CEO is buying although this is not a particularly large buy. Horgen though has been regularly buying the stock of the company he helms. Previous to this buy, he purchased twice this amount back in February and 35,000 shares last year, most of it at less than half of what he just paid for the last.

Affiliated Managers Group has been bargain-priced for some time as ETFs and low-cost index funds are the rage. AMG has proven you can pay high fees and still do everyone right including your public shareholders.  After all, you wouldn’t even think of. trying to go to the playoffs with a bunch of the lowest-paid players.  Why should money management be any different?

AMG is no longer a firesale.  It’s spent the last several months consolidating its big gains. They’ve proven that there is money to be made with good money managers and that’s not likely to change.

 

 

Name: Moskovitz Dustin A
Position: CEO Chairman 10% Owner
Transaction Date: 2021-09-13 Shares Bought: 13,915 Average Price Paid: $100.00 Cost: $1,391,500
Company: Asana Inc. (ASAN)
Asana is a web and mobile application designed to help teams organize, track, and manage their work. Forrester, Inc. reports that “Asana simplifies team-based work management. Asana helps teams orchestrate their work, from small projects to strategic initiatives. Headquartered in San Francisco, CA, Asana has more than 100,000 paying customers and millions of free organizations across 190 countries. Global customers such as Amazon, Japan Airlines, Sky, and Under Armour rely on Asana to manage everything from company objectives to digital transformation to product launches and marketing campaigns. Asana, Inc. offers a work management platform. The Company’s platform enables teams to orchestrate work, from daily tasks to cross-functional strategic initiatives. With its solution, Asana enables individuals to manage and prioritize across each of the projects. Its solution enables individuals to collaborate with teammates and have visibility into each team member’s responsibilities and progress. The Asana solution aids the team leads to manage work across a portfolio of projects or processes. The Company enables executives to communicate company-wide goals, monitor status, and oversee work across projects to gain real-time insights into which initiatives are on track or at risk. Asana is powered by its multidimensional data model called the work graph. The work graph captures and associates work units, the people responsible for executing those units of work, the processes in which work gets done, information about that work, and the relationships across and within the data.

Dustin Moskovitz is the co-founder and CEO of Asana. As Asana’s CEO, Dustin is dedicated to creating a product that helps the world’s teams collaborate effortlessly, in addition to leading the company’s award-winning culture. Prior to founding Asana, Dustin co-founded Facebook and served as the company’s first Chief Technology Officer and VP of Engineering.

Opinion: It’s always a bit of a guess trying to assign motives to insiders buying their own stock other than just out and out profiteering. There is often a lot more to it than just making a buck. In the case of Asana, I’d like someone to explain to me why Dustin Moskovitz is buying back his stock at more than twice the price he just sold it for a year ago. Yes, business is pretty good at ASANA, revenue up 70% in the last quarter,  but the Company doesn’t yet make money and it’s not likely they will dominate collaborative team software the way Facebook has dominated social media or Amazon e -commerce. It’s such weird insider buying behavior that Frank, the owner of SECForm4 messaged me a couple of weeks ago asking me if I had any insight into the Moscovitz mystery.

I shouldn’t have analyzed it all and just bought the stock. It’s up 22% from the last post, Insider Buying week 9-10-21 This is Trickery of the Highest Order, I blogged about aberrant buying behavior.

Name: Mariani Pedro Henrique
Position: Director
Transaction Date: 2021-08-25  Shares Bought: 3,000 Average Price Paid: $94.56 Cost: $283,680
Company: BALL Corp. (BLL)
Ball Corporation is an American company headquartered in Broomfield, Colorado. It is best known for its early production of glass jars, lids, and related products used for home canning. Since its founding in Buffalo, New York, in 1880, when it was known as the Wooden Jacket Can Company, the Ball company has expanded and diversified into other business ventures, including aerospace technology. It eventually became the world’s largest manufacturer of recyclable metal beverage and food containers. The Ball brothers renamed their business the Ball Brothers Glass Manufacturing Company, incorporated in 1886. Its headquarters, as well as its glass and metal manufacturing operations, were relocated to Muncie, Indiana, by 1889. The business was renamed the Ball Brothers Company in 1922 and the Ball Corporation in 1969. It became a publicly-traded stock company on the New York Stock Exchange in 1973. The ball left the home canning business in 1993 by spinning off a former subsidiary (Alltrista) into a free-standing company, which renamed itself Jarden Corporation. As part of the spin-off, Jarden is licensed to use the Ball registered trademark on its line of home-canning products. Today, the Ball brand mason jars and home canning supplies belong to Newell Brands.

Pedro Henrique Mariani joined Ball Corporation’s board of directors as advisory director in July 2010 and moved into the role of director in January 2018. He is CEO and member of the board, Banco BocomBBM, a Brazilian financial institution. Mr. Mariani joined BBM Group in 1981, was elected to the executive committee of Banco BBM in 1983 and was appointed its chief executive officer in 1991. Currently, he is an executive officer and member of the board of directors at Banco BBM. In addition to his director role with Ball, Mr. Mariani is a member of the board of directors at FEBRABAN (Brazilian Federation of Banks). He is a council member for Pró-Criança Cardíaca Project, a children´s hospital in Rio de Janeiro.

Opinion:  We blogged about the cluster insider buying in Ball on 8-20-21 and 8-27-21.  Insiders continue to buy. I continue to be unimpressed.

 

Name: Tang Vance W
Position: Director
Transaction Date: 2021-09-14  Shares Bought: 6,000  Average Price Paid: $66.06 Cost: $396,360
Company: American Woodmark Corp. (AMWD)
American Woodmark is a kitchen and bath cabinet manufacturer, headquartered in Winchester, Virginia. The company operates 9 manufacturing facilities, in Arizona, Georgia, Indiana, Kentucky, Maryland, Tennessee, Virginia, and West Virginia, and 9 builder service centers across the country. American Woodmark Corporation manufactures and distributes kitchen, bath, and home organization products for the remodeling and new home construction markets in the United States. It offers made-to-order and cash and carries products. The company also provides turnkey installation services to its direct builder customers through a network of eight service centers. American Woodmark Corporation sells its products under the American Woodmark, Timberlake, Shenandoah Cabinetry, Waypoint Living Spaces, Estate by RSI, Continental Cabinets, VillaBath by RSI, Stor-It-All, and Professional Cabinet Solutions brands, as well as Hampton Bay, Glacier Bay, Style Selections, Allen + Roth, Home Decorators Collection, and Project Source. It markets its products directly to home centers and builders, as well as through independent dealers and distributors. The company was incorporated in 1980 and is based in Winchester, Virginia. American Woodmark produces and distributes high-quality face frame kitchen and bath cabinetry through a variety of channels, including remodel, new construction, and specialty dealers. Cabinets are offered in a wide range of colors and materials. They are vertically integrated and source the majority of their hardwood raw materials from the Appalachian region. All cabinets are assembled in the US in one of four assembly plants throughout the country.

Tang joined the Board of Directors in 2009 and has served as non-executive chairman since 2020. Additionally, he served as president and chief executive officer of the U.S. subsidiary of KONE Corporation, a Finnish public company and a leading global provider of elevators and escalators, and executive vice president of KONE Corporation from 2007 to 2012. Presently, he acts as director of Comfort Systems USA, a publicly-traded provider of commercial and industrial specialty contracting including HVAC, electrical, security, and building automation installation and services, and president of VanTegrity Consulting focusing on leadership and growth strategies, both positions he has held since 2012. Tang’s 29-year career in the industry has been highlighted with leadership roles in operations. Mr. Tang’s former experience as a chief executive officer in the construction industry provides the Board with a valuable strategic perspective.

Opinion: I’ve been waiting to see an insider buy in this dominant cabinet maker. With housing on one of its biggest supply-demand imbalances in memory, it was unfathomable to me that AMWD stock could be performing as poorly as it has.

The Company reported Q1 revenue on 8/31 of   $442.6M with an EPS of $.70 versus a consensus of $461.79M and EPS of $1.55. Predictably the bottom fell out

“While delivering sales growth across all channels our adjusted EBITDA margins of 7.3% were below expectations. Although we have and are also in the process of implementing significant pricing actions due to the increasing inflationary pressures we are facing, we only realized approximately $3M of impact in the Q1 of FY22. Assuming our current sales level, we expect the impact of confirmed pricing actions to increase in the second half of FY22 to over $25M per quarter,” said Scott Culbreth, President and CEO. “Looking forward our focus remains on increasing production to match a strong demand environment and reducing backlog and realizing additional pricing actions to mitigate inflationary pressures in materials, logistics, and labor.”

Is there enough play left in the housing market for American Woodworks to get their act together? I think there is and we are long this name now.

 

Name: Farrell Matthew
Position: Director 10% Owner
Transaction Date: 2021-09-15 Shares Bought: 5,000 Average Price Paid: $48.53 Cost: $242,650
Company: Trinseo S.A. (TSE)
Trinseo S.A., a materials company, manufactures and markets synthetic rubber, latex binders, and plastic products in the United States, Europe, the Asia-Pacific, and internationally. The company operates through six segments: Latex Binders, Synthetic Rubber, Performance Plastics, Polystyrene, Feedstocks, and Americas Styrenics. The Latex Binders segment offers styrene-butadiene, styrene-acrylate, vinylidene chloride, and butadiene-methacrylate latex products for the carpet and artificial turf markets, as well as performance latex products for the adhesive, building and construction, and technical textile paper market. The Synthetic Rubber segment provides styrene-butadiene rubber, emulsion styrene-butadiene rubber, nickel polybutadiene rubber, and neodymium polybutadiene rubber for use in tires and modifiers, as well as technical rubber products, such as conveyor belts, hoses, seals, and gaskets. The Performance Plastics segment offers engineered compounds and blends for the automotive, consumer electronics, medical, electrical, building and construction, appliance, and lighting markets. This segment also offers acrylonitrile-butadiene-styrene, styrene-acrylonitrile, and polycarbonate solutions; and soft-touch polymers and bioplastics, such as thermoplastic elastomers. The Polystyrene segment provides general-purpose polystyrenes and high-impact polystyrene for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials. The Feedstocks segment offers styrene monomer, a basic building block of plastic. The Americas Styrenics segment provides styrene and polystyrene. Trinseo S.A. was founded in 2010 and is based in Berwyn, Pennsylvania.

Matthew Farrell became a director of our Company on November 1, 2020. Mr. Farrell is the Chairman, President, and Chief Executive Officer of Church & Dwight Co. Inc. (“Church & Dwight”), serving since 2016 and as Chairman since 2019. Mr. Farrell served as Executive Vice President, Chief Financial Officer, and Chief Operating Officer at Church & Dwight since 2014, and as Chief Financial Officer since 2006. Prior to that, Mr. Farrell served as Chief Financial Officer of Alpharma Inc., as Vice President, Investor Relations & Communications at Ingersoll-Rand Ltd., and in various senior financial positions at AlliedSignal Inc., Mr. Farrell began his career with KPMG Peat Marwick LLP, where he was an audit partner. Mr. Farrell has served on the board of Lydall Co., Inc. (NYSE: LDL) since 2003. Mr. Farrell received a B.S. degree from Manhattan College and is a certified public accountant (inactive). Mr. Farrell brings to the board of directors his experience as a chief executive officer, substantial financial and audit expertise, and experience in the chemicals, industrial goods, and consumer products industries.

Opinion: I’ve always thought that directors buying around $200k was basically a no-lose proposition for them. That’s certainly the case with poor-performing Trinseo. From the proxy statement “For each of our non-employee directors, our director compensation program consists of an annual cash retainer payment of $90,000, and an annual equity retainer of restricted stock units with a grant date fair value of $120,000, which vest on the one-year anniversary of their grant date. Additionally, the Board’s non-employee chair receives an additional annual cash retainer of $100,000. The non-employee chairs of the audit committee, compensation committee, and nominating and corporate governance committee receive additional annual cash retainers of $25,000, $15,000, and 10,000, respectively.

 

 

Name: Stewart Alan R
Position: CFO
Transaction Date: 2021-09-14  Shares Bought: 5,000 Average Price Paid: $34.74 Cost: $173,716
Company: Shotspotter Inc. (SSTI)
ShotSpotter Inc. is a Newark, California-based company known for its gunfire locator technology, sold to law enforcement. It is traded on NASDAQ under SSTI and began in 1996. ShotSpotter, Inc. provides precision-policing and security solutions for law enforcement and security personnel in the United States, South Africa, and the Bahamas. Its solutions include ShotSpotter Respond, a public safety solution, which serves cities and municipalities to identify, locate, and deter gun violence by incorporating a real-time gunshot detection system into their policing systems; and ShotSpotter Connect, a patrol management software to help plan directed patrols and tactics for crime deterrence. The company also provides ShotSpotter SecureCampus and ShotSpotter SiteSecure that helps the law enforcement and security personnel serving universities, corporate campuses, big-box retail, malls, and key infrastructure or transportation centers to mitigate risk and enhance security by notifying authorities of an outdoor gunfire incident and saving minutes for first responders to arrive. In addition, it offers ShotSpotter Investigate, a cloud-based investigative platform to help law enforcement agencies modernize every phase of an investigation and accelerate casework with easy-to-use software tools. Further, it provides ShotSpotter Labs, a technology to adapt and extend commercial technology to address significant wildlife and environmental issues. The company sells its solutions through its direct sales teams.

Alan R. Stewart serves as Chief Financial Officer bringing a strong background in mergers, acquisitions, and corporate finance to the company. Prior to joining ShotSpotter, Stewart served as Managing Director of RA Capital Advisors, LLC, a private investment bank specializing in mergers and acquisitions, private financings, and restructurings.  From 2004 to 2014, he served as Chief Financial Officer and then Chief Development Officer of Epsilon Systems Solutions, Inc. Since 2008, Mr. Stewart has served as President of FIT Advisors, LLC, a boutique consulting firm that offers temporary CFO services and served clients from start-up ventures to large private companies in vertical industries spanning government contracting, software, retail, healthcare IT, banking and Internet application.

Opinion: Shotspotter is a really cool technology.  They place sensors through the city and their software can triangulate and alert police in real-time exact locations where gunfire was identified. Otherwise, the police get a 9-11 call that shots are fired and they are driving around randomly trying to locate it.  The stock made a sharp move in a bad tape on Friday that the CFO had bought a modest amount of stock.  I just don’t know the size of the total addressable market for this and whether it warrants the overhead of a stand alone publicly-traded company.

 

Name: Shaughnessy Maura
Position: Director
Transaction Date: 2021-09-14  Shares Bought: 30,000 Average Price Paid: $23.79 Cost: $713,823
Company: AES CORP. (AES)
The AES Corporation is a Fortune 500 company that generates and distributes electrical power. AES is headquartered in Arlington, Virginia, and is one of the world’s leading power companies, generating and distributing electric power in 15 countries and employing 10,500 people worldwide. The company was initially a consulting firm; it became AES Corporation, which went public in 1991. Sant was chairman, CEO, and president and Bakke was executive vice president until assuming the position of president in 1987. Bakke would later become the company’s CEO in 1994, serving for 8 years until his resignation in 2002, in the midst of a liquidity crisis that followed the collapse of the energy giant Enron. The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company also owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses a range of fuels and technologies to generate electricity, including natural gas, coal, pet coke, diesel, and oil, as well as renewables, such as hydro, solar, wind, energy storage, biomass, and landfill gas. The company owns and/or operates a generation portfolio of approximately 30,308 megawatts. It has operations in the United States, Puerto Rico, El Salvador, Chile, Colombia, Argentina, Brazil, Mexico, Central America, the Caribbean, Europe, and Asia. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.

Maura Shaughnessy has been a director of AES since July 2021 and serves as a member of the Financial Audit and the Innovation and Technology Committees. After thirty-two years in the investment management industry, Ms. Shaughnessy brings to the AES Board a deep knowledge of the global utilities and energy infrastructure industries.  She began her career as a Research Assistant at the Board of Governors of the Federal Reserve in the domestic macro section.  After earning her M.B.A., Ms. Shaughnessy became an Equity Research Analyst at Harvard Management Company, covering several industries including electric utilities.  In 1991, Ms. Shaughnessy joined MFS Investment Management (“MFS”) as an equity analyst and in the following year, launched and managed the MFS Utilities Fund until her retirement in 2019.

Opinion: We like all things that play on the electrification of America. My highest conviction macro call is that electricity usage is going to outpace all industry and analyst expectations.  Global electricity demand is growing faster than renewables driving a strong increase in generation from fossil fuels according to this July report from the IEA.

Obviously, Maura is a super well-informed industry expert. It’s also a sizeable buy.  What Shaughnessy doesn’t know, nor do I, is how utility stocks will react in a rising interest rate environment. In the long term, they are immune from inflationary cost pressures as their costs are generally legislatively authorized to be passed through to the consumer. Short term this can be quite a lag as public utility commission hearings don’t happen at the drop of the hat.

 

Name: Watters John P
Position: COO
Transaction Date: 2021-09-10 Shares Bought: 25,000 Average Price Paid: $18.49 Cost: $462,225
Company: FireEye Inc. (FEYE)
FireEye, Inc. provides intelligence-based cybersecurity solutions to prepare for, prevent, investigate, respond to, and remediate cyber-attacks in organizations. Its FireEye products include network, email, endpoint, and cloud security control products to detect and prevent threats; Dynamic Threat Intelligence Cloud, a bi-directional cloud-based service; Helix Security Operations Platform, a cloud-hosted security operations platform; Cloudvisory cloud security products; and customer support and maintenance services. The company also offers Mandiant Threat Intelligence that provides access to threat data and indicators; Mandiant Security Validation allows organizations to measure, manage, and communicate the efficiency of their security controls; Mandiant Defense, a cloud-native extended detection and response solution; and managed detection and response, and managed validation services. In addition, it provides incident response, security assessment, security transformation, cybersecurity training, and expertise-on-demand services. The company serves telecommunications providers, financial services entities, software, technology and Internet companies, stock exchanges, electrical grid operators, networking vendors, oil and gas companies, healthcare and pharmaceutical companies, and governmental agencies. It offers its products and services through distributors, resellers, and strategic partners in the United States, Europe, the Middle East, Africa, the Asia Pacific, and Japan. The company was formerly known as NetForts, Inc. and changed its name to FireEye, Inc. in September 2005. FireEye, Inc. was founded in 2004 and is headquartered in Milpitas, California,

John serves as FireEye President and Chief Operating Officer. He has served in various roles with the Company since the Company acquired iSIGHT Partners in 2016, including as a consultant from May 2020 to April 2021, as Chairman of the FireEye Advisory Board from April 2020 to April 2021, as Executive Vice President and Chief Strategy Officer from February 2018 to April 2020, as Executive Vice President, Global Services and Intelligence from January 2017 to January 2018, and as President of iSIGHT from March 2016 to January 2017. Prior to FireEye, John served as founder, Chairman, Chief Executive Officer, and President of iSIGHT Partners from November 2006 to February 2016.

Opinion: I wrote quite a bit about FEYE on the previous blog post, Insiders have conviction where the market lacks it.

We like FEYE and have a decent-sized position. It’s always good to see insiders having more conviction. It’s a confusing company with the product divesture but insiders seem to have a lot of conviction. I think investors should too.

Name: Rapp Michael
Position: Director $194,000
Transaction Date: 2021-09-09 Shares Bought: 45,950 Average Price Paid: $18.07 Cost: $830,449
Company: Immunome Inc. (IMNM)
Immunome, Inc., a biopharmaceutical company, discovers and develops antibody therapeutics for oncology and infectious disease. The company’s lead oncology program includes IMM-ONC-01, which targets IL-38 tumor-derived immune checkpoint capable of promoting evasion of the immune system. It also develops IMM-BCP-01, an antibody cocktail product candidate for the treatment of SARS-CoV-2 infections and COVID-19. The company was incorporated in 2006 and is headquartered in Exton, Pennsylvania. Immunome was founded to advance the discovery and development of antibody-based drugs. Their proprietary antibody Discovery Engine identifies novel therapeutic antibodies, and their antigen targets, by leveraging the most highly-educated components of the B cells from patients who have learned to fight off their disease. Immunome, Inc. (Nasdaq: IMNM), a biopharmaceutical company that utilizes its human memory B cell discovery engine platform to discover and develop first-in-class antibody therapeutics, today announced a $4.3 million increase awarded by the U.S. Department of Defense’s (DOD) Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (JPEO-CBRN), in collaboration with the Defense Health Agency (DHA), for the continued development of an antibody cocktail (IMM-BCP-01) to combat SARS-CoV-2 and its variants. The additional capital comes less than a year after an initial DOD award of $13.3 million, bringing the total commitment to Immunome to $17.6 million. The additional funding is to support the expansion of the clinical study following feedback from the FDA. Immunome is continuing efforts towards an IND filing for IMM-BCP-01 in late 2Q/early 3Q 2021.

Michael Rapp has more than 30 years of experience in the financial industry and is the Managing Member of Broadband Capital Investments, LLC, a middle-market private equity sponsor focused on high-growth companies. Mr. Rapp has been instrumental in providing early financing and for advising exciting growth companies including; Examworks (acquired by Leonard Green), Montrose Environmental (the leading US environmental services company), Vroom.com (Nasdaq: VRM), the leading internet used car company, Zynerba Pharmaceuticals (Nasdaq: ZYNE), a leading cannabinoid biotech company, and Hydrofarm (a leading hydroponics distribution company).

Opinion: IMNM is up 36% since Rapp bought shares last week. I don’t see any reasons for this dramatic rise other than the filing of his purchase. I’d avoid this one for now.

 

Name: Kushner Joshua
Position: Director 10% Owner
Transaction Date: 2021-09-14 Shares Bought: 839,069 Average Price Paid: $18.00 Cost: $15,106,290

Name: Schlosser Mario
Position: CEO
Transaction Date: 2021-09-16  Shares Bought: 57,300 Average Price Paid: $17.53 Cost: $1,004,515
Company: Oscar Health Inc. (OSCR)
Oscar Insurance Corporation is an American health insurance company, founded in 2012 by Joshua Kushner and Mario Schlosser, and is headquartered in New York City. The company focuses on the health insurance industry through telemedicine, healthcare-focused technological interfaces, and transparent claims pricing systems which would make it easier for patients to navigate. Oscar Health, Inc. provides health insurance products and services in the United States. The company offers Individual & Family, Small Group, and Medicare Advantage plans, as well as +Oscar, a full-stack technology platform. It also provides reinsurance products. The company was formerly known as Mulberry Health Inc. and changed its name to Oscar Health, Inc. in January 2021. Oscar Health, Inc. Oscar Health, Inc. (“Oscar”) is the first health insurance company built around a full-stack technology platform and a relentless focus on serving its members. Our mission is to make a healthier life accessible and affordable for all. Their member-first philosophy and innovative approach to care have earned them the trust of approximately 529,000 Americans across 291 counties in 18 states, as of January 31, 2021. They offer Individual & Family, Small Group, and Medicare Advantage plans. Their vision is to refactor health care to make good care cost less. Refactor is a term used in software engineering that means to improve the design, structure, and implementation of the software while preserving its functionality. At Oscar, they take this definition a step further. They improve their members’ experience by building trust through deep engagement, personalized guidance, and rapid iteration.

Joshua Kushner is an American businessman, heir, and investor. He is the founder and managing partner of the venture capital firm Thrive Capital, co-founder of Oscar Health, and the son of billionaire real estate developer Charles Kushner. Joshua is a co-founder of Oscar Health, a health insurance start-up. The startup was in 2012, Oscar was valued at $2.7 billion in 2016. In the year 2015, Kushner founded a new company called Cadre with his brother Jared and their friend Ryan Williams. Moreover, it is a technology platform designed to help certain types of clients. It helped clients such as family offices and endowments invest in real estate. Joshua owns 50% of JK2 (also known as Westminster Management), a real estate management company, his brother Jared owns the other 50%.

Mario Schlosser is the CEO and co-founder of Oscar, the first health insurance company built around a full-stack technology platform and a relentless focus on serving its members. Since co-founding Oscar in 2012, Mario has led the company in making great progress against its mission of making a healthier life accessible and affordable for all. After eight years of selling health insurance, Oscar has earned industry-leading levels of trust, engagement, and customer satisfaction from 529,000 members who, as of January 31, 2021, have chosen Oscar.

Opinion: We took a flyer this Friday but there are other names in the industry we prefer like Bright Health Group BHG.  Clearly, the stock performance has been disappointing. These two large buys should restore some confidence and get a nice bump in price if the market doesn’t sell off further. That’s a big iff and that’s why we didn’t purchase more.

 

Name: Loza Jose De Jesus
Position: Director
Transaction Date: 2021-09-10  Shares Bought: 8,930 Average Price Paid: $15.44 Cost:$137,879
Company: Limoneira CO. (LMNR)
Limoneira Company operates as an agribusiness and real estate development company in the United States and internationally. The company operates through four segments: Fresh Lemon, Lemon Packing, Avocados, and Other Agribusiness. It grows, processes, packs, markets, and sells lemons. The company also grows avocado, oranges, specialty citrus, and other crops, including Moro blood oranges, Cara Cara oranges, Minneola tangelos, Star Ruby grapefruit, pummelos, pistachios, and wine grapes. It has approximately 6,000 acres of lemons planted primarily in Ventura, Tulare, San Luis Obispo, and San Bernardino Counties in California; and Jujuy, Argentina, as well in Yuma County, Arizona, and La Serena, Chile; 900 acres of avocados planted in Ventura County; 1,400 acres of oranges planted in Tulare County, California; and 900 acres of specialty citrus and other crops. In addition, the company rents residential housing units and commercial office buildings and leases approximately 500 acres of its land to third-party agricultural tenants. Further, it is involved in organic recycling operations; and the development of land parcels, multi-family housing, and single-family homes. The company markets and sells its lemons directly to the foodservice, wholesale, and retail customers; avocados to a packing and marketing company; oranges, specialty citrus, and other crops through Sunkist and other third-party packinghouses; and wine grapes to wine producers. Limoneira Company was founded in 1893 and is headquartered in Santa Paula, California.

Mr. Loza has come full circle after growing up on Limoneira’s main ranch in Santa Paula with his family in the 1970s. Mr. Loza began his produce experience by joining youth crews at Limoneira. he began working for various production companies, built operations in Mexico. He grew sales in Europe, Asia, and Canada. As mangoes gained popularity in the U.S., Mr. Loza started several companies to accelerate the growth of this important fruit. In 2004, he began Freska Produce, which became one of the country’s largest providers of mangos. The company also provides avocados as well as refrigeration services to strawberry growers. Freska has strategically located distribution centers and grows international sales of mangos, avocados, and other compatible products.

Opinion: I like the business strategy.  Plant crops and when urban growth encroaches trade-in lemons for lemonade aka housing subdivisions. After racing higher in June, the stock has been on a steady descent with no apparent negative headlines. It trades low volume by appointment only. We bought some here and would buy a lot more but don’t like the lack of liquidity.

 

Name: Warner Jane L
Position: Director
Transaction Date: 2021-09-13  Shares Bought: 20,000 Average Price Paid: $13.96 Cost: $276,000
Company: Tenneco Inc. (TEN)
Tenneco (formerly Tenneco Automotive and originally Tennessee Gas Transmission Company) is an American automotive components original equipment manufacturer and an aftermarket ride control and emissions products, manufacturer. It is a Fortune 500 company that has been publicly traded on the New York Stock Exchange since November 5, 1999, under the symbol TEN. With headquarters in Lake Forest, Illinois, Tenneco, United States, Tenneco Inc. designs, manufactures, and sells clean air, powertrain, and ride performance products and systems for light vehicles, commercial trucks, and off-highway, industrial, and aftermarket customers worldwide. The company operates through Clean Air, Powertrain, Ride Performance, and Motorparts segments. It offers clean air products and systems, including catalytic converters and diesel oxidation catalysts; diesel particulate filters(DPFs); burner systems; lean nitrogen oxide (NOx) traps; selective catalytic reduction (SCR) systems; hydrocarbon vaporizers and injectors; SCR-coated diesel particulate filters systems; urea dosing systems; four-way catalysts; alternative NOx reduction technologies; mufflers and resonators; fabricated exhaust manifolds; pipes; hydroformed assemblies; elastomeric hangers and isolators; and after treatment control units. The company also provides powertrain products and systems, such as pistons; piston rings; cylinder liners; valve seats and guides; bearings, spark plugs; valvetrain products; system protection products; and seals, etc. gaskets. In addition, it offers motor parts, including steering and suspension, braking, sealing, engine, emission, and maintenance products, as well as shocks and struts; and ride performance products, and systems comprising advanced suspension technologies, and ride control and braking products, as well as noise, vibration, and harshness performance materials. The company was formerly known as Tenneco Automotive Inc. and changed its name to Tenneco Inc.

Ms. Jane L. Warner is an Independent Director at Brunswick Corp., an Independent Director at Tenneco, Inc., a Member at The Chicago Network, and a Member of The Committee of 200. She is on the Board of Directors at Brunswick Corp., Tenneco, Inc., Shedd Aquarium Society, Great Lakes Center For The Arts, Original Equipment Suppliers Association, and Kettering University. Ms. Warner was previously employed as an Independent Director by Regal Beloit Corp., an Executive VP-Decorative Surfaces & Finishing by Illinois Tool Works, Inc., a President by Plex Systems, Inc., a President by Plexus Systems LLC, a President by Global Manufacturing & Communications Industries, an Independent Director by MeadWestvaco Corp., a Vice President by Electronic Data Systems Corp., a Managing Director by The Automotive Industry Action Group, a President & Executive Vice President by Kautex North America, Inc., an Executive Vice President by Textron Automotive Co., Inc., and an Assistant Chief Engineer by General Motors Corp.

Opinion: Carl Icahn has been a seller and I doubt if he has lost his iconic touch completely. The last high-profile investment decisions of his leave some doubt about this. Occidental and Hertz both have been problematic on their own and Tenneco looks like more of the same.

 

 

Name: Margulies Anne H
Position: Director
Transaction Date: 2021-09-14  Shares Bought: 20,000 Average Price Paid: $11.46 Cost: $229,200
Company: SomaLogic Inc. (SLGC)
SomaLogic is a protein biomarker discovery and clinical diagnostics company It became listed on Nasdaq in September 2021 with a merger with the special-purpose acquisition company CM Life Sciences II, Inc. SomaLogic, Inc. operates as a protein biomarker discovery and clinical diagnostics company in the United States. It develops slow-off rate modified aptamers (SOMAmers), which are modified nucleic acid-based protein-binding reagents that are specific for their cognate protein; and offers proprietary SomaScan services, which provide multiplex protein detection and quantification of protein levels in complex biological samples. The company’s SOMAmers/SomaScan technology enables researchers to analyze various types of biological samples for protein biomarker signatures, which can be utilized in drug discovery and development. Its SomaScan biomarker discoveries help in diagnostic applications in various areas of diseases, including cardiovascular and metabolic disease, nonalcoholic steatohepatitis, wellness, and others. The company’s solutions also include SomaSignal tests, which are research use only tests for clinical trial applications. It serves the research and clinical customers with a focus on pharmaceutical and biotechnology companies, and academic research institutions; and facilitates drug development, analysis of clinical trials, and new human biology insights by assessing protein-protein and protein-gene networks. The company was incorporated in 1999 and is headquartered in Boulder, Colorado.

Ms. Anne H. Margulies is an Independent Director at Henry Schein, Inc., an Independent Director at SomaLogic, Inc. /New/ and a Member at Massachusetts Technology Collaborative. She is on the Board of Directors at SomaLogic, Inc., Henry Schein, Inc., Heading Home, Inc., and SomaLogic, Inc. /New/. Ms. Margulies was previously employed as a Chief Information Officer & Vice President by Harvard University, an Executive Director-OpenCourseWare by Massachusetts Institute of Technology, and a Chief Information Officer by the State of Massachusetts. She received her undergraduate degree from the State University of New York College at Plattsburgh.

Opinion: No chart as this company is too new, a SPAC creation. I wish I could add something cogent other than there is a big fucking catalyst about to happen.  SLGC is going to host their Tuesday, September 28, 2021 from 11:00 a.m. to approximately 1:00 p.m. Eastern Time. The event will feature presentations from company leaders outlining SomaLogic’s technology, addressable market opportunity, financial outlook, and key metrics for success as it continues its scientific and commercial progress. Speaker remarks will be followed by a live Q&A session.

 

Name: Levenick Zachary
Position: Director
Transaction Date: 2021-09-09  Shares Bought: 50,000 Average Price Paid: $10.15 Cost: $253,700
Company: Barnes & Noble Education Inc. (BNED)
Barnes & Noble Education, Inc. operates bookstores for college and university campuses and K-12 institutions in the United States. It operates in three segments: Retail, Wholesale, and Digital Student Solutions. The company sells and rents new and used print textbooks, digital textbooks, and publisher-hosted digital courseware through physical and virtual bookstores, as well as directly to students through Textbooks.com. It also offers First Day and First Day Complete access programs; BNC OER+, a turnkey solution for colleges and universities, that offers digital content, such as videos, activities, and auto-graded practice assessments; and general merchandise, including collegiate and athletic apparel, school spirit products, lifestyle products, technology products, supplies, and convenience items. In addition, the company sells hardware and a software suite of applications that provides inventory management and point-of-sale solutions; direct-to-student subscription-based writing services; and Bartleby, a direct-to-student subscription-based offering that includes textbook solutions, expert questions and answers, AI-based writing assistance, and tutoring services. As of June 29, 2021, it operated 769 physical college and university bookstores; and 648 virtual bookstores. The company also operates 148 True Spirit e-commerce websites; pop-up retail locations; and 77 customized cafés and 12 stand-alone convenience stores. Barnes & Noble Education, Inc. was founded in 1965 and is headquartered in Basking Ridge, New Jersey.

Zachary Levenick was elected to the Board in October 2020. Mr. Levenick has been a private investor in real estate and public and private securities with a focus on growing innovative or disruptive businesses in established industries, including financial services, female health, and fitness since January 2019. From 2002 to January 2019, Mr. Levenick served in various roles at Taconic Capital Advisors, LP (“Taconic”), a multibillion-dollar New York-based private investment firm, most recently serving as Principal, Co-Head of European Investing beginning in 2011. During his time at Taconic, Mr. Levenick co-managed the firm’s London-based European operations and was Portfolio Manager for European Equities investing, where focus areas included consumer products, retail, and general industries. He also established and oversaw Taconic’s public and private investment efforts in Brazil, Mexico, Chile, and Argentina, where focus areas included education and logistics.

Opinion: Barnes and Noble has reinvented itself as a college book store.  The electronic reader, the vast network of book stores have all fallen pretty to disruptors and competitors.  Then Covid. It’s a bad luck run of biblical proportions. Covid will pass, universities will swarm with kids again buying overpriced books, required reading,  written by their professors and part of the whole upper-level education business industry.  The disruptor here is Chegg.  Barnes and Noble is just making its way.

 

Name: Lane Flint A
Position: CEO 10% Owner
Transaction Date: 2021-09-13  Shares Bought: 100,000 Average Price Paid: $10.14 Cost: $1,013,746

Name: Shifke Mark L
Position: CFO
Transaction Date: 2021-09-13  Shares Bought: 29,752 Average Price Paid: $10.13 Cost: $301,414
Company: BTRS Holdings Inc. (BTRS)
BTRS Holdings Inc. provides cloud-based software and integrated payment processing solutions that simplify and automate B2B commerce. It offers solutions that span credit decisions and monitoring, online ordering, invoicing, cash application, and collections. These solutions integrate with various ecosystem players, including financial institutions, enterprise resource planning systems, and accounts payable software platforms, to help customers to transition from paper invoicing and check acceptance to electronic billing and payments. The company’s proprietary technology platform offers customers various ways to present invoices, such as online, email, AP portal, and print/mail; and receive payments through credit card, ACH, email, phone, and paper check. It serves customers across diversified industry verticals comprising technology, healthcare, industrial, wholesale distribution, consumer packaged goods, and others. Billtrust makes it easier for B2B companies to get paid. They’ve been the leading innovator in AR automation for nearly two decades and continue accelerating. Their customers span 40+ industries, and they lead with a double-digit market share in many industries they serve. They provide automated order-to-cash solutions that meet diverse buyer requirements and speed cash application through tailored invoice delivery, secure multi-channel payment enablement, and intelligent matching and payment posting. Their unparalleled expertise in AR informs everything that they do. They innovate by pushing automation into new areas like their supplier-driven payments network, automated invoice delivery into AP portals, and automated credit application processes. They drive results by helping their customers increase electronic adoption of invoices and payments and widening technology bottlenecks. Amazing customer experiences are possible with their connected solutions. They give their customers the power to conduct business unencumbered by manual interactions. The company was founded in 2001 and is headquartered in Lawrenceville, New Jersey.

Flint is the founder and CEO of Billtrust. He has set the strategic direction of the company since its founding in 2001. Under his leadership, the company has enjoyed significant growth providing invoice-to-cash services to companies throughout North America. Billtrust has earned numerous awards, including four consecutive years of Best Places to work in NJ and Inc. 5000 for ten consecutive years. Flint has been named one of the 25 Most Influential Financial Operations Professionals by the Institute of Financial Operations (IFO) and has been recognized as the Ernst & Young Entrepreneur Of The Year®. He has also been awarded the 2017 Technology CEO of the Year by the Greater Philadelphia Alliance for Capital and Technologies.

As CFO, Mark Shift is responsible for Billtrust’s financial health. Bringing over 35 years of experience to Billtrust, Mark most recently served as CFO at Green Dot, holding General Manager, Government Programs and VP, Special Projects positions. Previously, he served as Managing Director, M&A, and Corporate Finance Advisory at J.P. Morgan and as a VP at Goldman Sachs. He has also served as a Partner at Davis Polk & Wardwell LLP, a law firm, and a Principal at KPMG LLP.

Opinion: SPACs are falling apart as fast as ice melting in an Alabama summer. Fintechs are supposed to be hot and Billtrust is melting down.  So what is it? Are the three insiders that just dropped $1.8 M on shares delusional or has the panic in all things SPAC created another buying opportunity.  What I don’t get is that Billtrust has been at it for 20 years and total revenue increased 16.3% last qtr over qtr to just $40.2 million from $34.6 million for the same period in 2020. Net loss and comprehensive loss was $(10.7) million compared to $(2.9) million for the same period in 2020. This doesn’t look like a disrupter.  Besides these SPACs are messy cap tables. It’s hard to figure out how many shares and when sponsors will sell.

 

 

Name: Levine James E
Position: CFO
Transaction Date: 2021-09-10 Shares Bought: 30,000 Average Price Paid: $6.47 Cost: $194,000
Company: Cardiff Oncology Inc. (CRDF)
Cardiff Oncology is a clinical-stage oncology company, developing new precision medicine treatment options for cancer patients in indications with the greatest unmet medical need. Their goal is to target tumor vulnerabilities with treatment combinations that overcome disease resistance and improve disease response to standard treatment regimens and increase overall survival. They are developing onvansertib, a first-in-class, third-generation Polo-like Kinase 1 (“PLK1”) inhibitor, in combination with standard-of-care anti-cancer therapeutics. Their clinical development programs incorporate tumor genomics and biomarker technology to refine the assessment of patient response to treatment. They have three clinical programs currently ongoing: a Phase 1b/2 study of onvansertib in combination with FOLFIRI/Avastin® (bevacizumab) in KRAS-mutated metastatic colorectal cancer (mCRC); a Phase 2 study of onvansertib in combination with Zytiga® (abiraterone)/prednisone in metastatic castrate-resistant prostate cancer (mCRPC); and a Phase 2 trial of onvansertib in combination with nanoliposomal irinotecan, leucovorin, and fluorouracil for the second-line treatment of patients with metastatic pancreatic ductal adenocarcinoma (PDAC). A Phase 2 study of onvansertib in combination with decitabine in relapsed or refractory acute myeloid leukemia (AML) completed enrollment in 2020. 

Mr. Levine has served as Chief Financial Officer since 2021. Mr. Levine has extensive corporate and investment banking experience with both private and public biotechnology and pharmaceutical companies. Prior to joining Cardiff Oncology, Mr. Levine served as CFO of Cidara Therapeutics, where he led the financial aspects of important pre-clinical and clinical collaborations with Janssen Pharmaceuticals (part of Johnson & Johnson) and Mundipharma with a combined value of over $1.3 billion. Previously, Mr. Levine was the president and chief executive officer of Sapphire Energy Inc., a private industrial biotechnology company that was sold to two private investor groups. He also previously served in the same roles at Verenium Corp., where he negotiated six product commercialization partnerships and asset sales, before selling the company to BASF. He also previously was a managing director in the investment banking division of Goldman Sachs & Co., serving in its healthcare and energy groups.

Opinion: Levin was named CFO in July. He probably had to buy the stock. Well, expected to might be a better way of putting it.  You don’t have to.

Name: Tarica Laurence
Position: Director
Transaction Date: 2021-09-14  Shares Bought: 26,000 Average Price Paid: $6.42 Cost: $166,920
Company: Gannett Co. Inc. (GCI)
Gannett Co., Inc. operates as a media and marketing solutions company in the United States. It operates through two segments, Publishing and Digital Marketing Solutions. The company’s principal products include 253 daily newspapers with a total paid circulation of approximately 2.6 million and Sunday circulation of 3.0 million; 308 weekly newspapers with a total circulation of approximately 1.6 million; and 375 locally-focused websites. Its principal products also comprise 121 daily and weekly news media brands and approximately 100 magazines, and related digital platforms; USATODAY.com and mobile applications, and sports network, as well as Reviewed.com, an affiliate marketing service; and USA TODAY NETWORK, a community events platform. The company also offers digital marketing solutions, such as online presence solutions, online advertising products, conversion software, and cloud-based software solutions. In addition, it produces niche publications that address specific local market interests, such as recreation, sports, healthcare, and real estate. Further, the company offers local market news and information, as well as advertising and subscriptions, and commercial printing and distribution services; and prints commercial materials, including flyers, business cards, and invitations. The company was formerly known as New Media Investment Group Inc. and changed its name to Gannett Co., Inc. in November 2019. Gannett Co., Inc. was founded in 1906 and is headquartered in McLean, Virginia.

Laurence Tarica serves as Independent Director of the Company. Mr. Tarica has been a member of our Board since January 2014. He served as President and Chief Operating Officer of Jimlar Corporation (“Jimlar”), a member of the Li and Fung Group, from March 1991 until his retirement in December 2014. Jimlar was privately held until it was acquired by the Li and Fung Group in 2010. Mr. Tarica joined Jimlar in 1971 and served in leadership roles in sourcing, design, development, sales, and marketing. Jimlar is one of the oldest footwear import companies in America. Mr. Tarica also serves on the board of directors of D’Addario and Company, a manufacturer of musical instrument accessories. Mr. Tarica also serves on the Advisory Board of the New York Mets.

Opinion: There was a lot of money to be made last May buying the country’s largest chain of dying newspapers below $1 but now at over $6 the going will be much harder.

 

Name: Potere Matthew
Position: CEO
Transaction Date: 2021-09-10  Shares Bought: 85,000 Average Price Paid: $5.41 Cost: $459,850

Name: Edinburg Barry
Position: CFO
Transaction Date: 2021-09-10  Shares Bought: 75,000 Average Price Paid: $5.35 Cost: $400,875
Company: Sunlight Financial Holdings Inc. (SUNL)
Sunlight Financial Holdings Inc. operates a business-to-business-to-consumer, technology-enabled point-of-sale financing platform that serves residential solar and home improvement contractors in the United States. Its platform provides homeowners secured and unsecured loans originated by third-party lenders to purchase and install residential solar energy systems and other home improvements. The company was incorporated in 2014 and is based in New York, New York. They partner with contractors nationwide to offer homeowners innovative, affordable loans. Their best-in-class technology and deep credit expertise simplify and streamline consumer finance, enabling their strategic partners to quickly and easily provide homeowners with simple access to financing. They’re in it for the long term, with their partners and their customers. They secure financial commitments, then make loans available fairly and responsibly. In a rapidly changing market, they develop simple, intuitive processes that accelerate the purchase, sale, and installation of residential solar systems and home improvements. They care deeply about user experience and keep contractors and homeowners top of mind in their online portal and flexible APIs. They work with their strategic partners to create financial products that they believe in. And they hire, train and develop teammates committed to providing service and support as reliable as the sun itself.

Matt serves as Sunlight’s CEO and is a member of the Board of Directors. Matt joined Sunlight from Bank of America, a Senior Vice President responsible for the Bank’s $90 billion home equity portfolio. Before Bank of America, Matt served as the Chief Operating Officer of Swift Financial, a small business lender. Before Swift, Matt held senior credit, marketing, and operations roles at MBNA America and assisted in launching MBNA’s Canadian operations.

Barry serves as Sunlight’s CFO. He joined Sunlight from Spruce Finance, where he had also served as the CFO. Barry had been the CFO of Kilowatt Financial before its merger with Clean Power Finance to form Spruce. Before Kilowatt Financial, Barry was a Managing Director at Fortress Investment Group, responsible for both making and managing private equity investments in financial services and other businesses and generally for the capital markets activities of Fortress portfolio companies.

Opinion: SUNL rose 7%-8% last week after the purchase in a bad tape.  Cowen analyst Jeffrey Osborne initiated coverage of Sunlight Financial with an Outperform rating and $15 price target on July 22nd,  shortly after the SPAC combination was completed. He wrote that SUNL had the strongest credit quality in the industry and was poised to capitalize on the solar energy industry expansion and the “even faster-paced” solar loan growth as the first publicly listed residential solar firm that specializes solely in loans. It’s an interesting thesis but like most of these SPACs, the sponsor’s greed gets in the way of public shareholder’s interests.

 

Name: Wu Jinn
Position: Director
Transaction Date: 2021-09-14  Shares Bought: 50,000 Average Price Paid: $3.22 Cost: $161,000
Company: Athenex Inc. (ATNX)
Athenex, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of drugs for the treatment of cancer. It operates through three segments: Oncology Innovation Platform, Global Supply Chain Platform, and Commercial Platform. The company’s Orascovery product candidates include Oral Paclitaxel, an oral dosage form, which is in Phase III trial for metastatic breast cancer, as well as various clinical studies in advanced malignancies and gastric cancer; and Oral Irinotecan and Encequidar, a potent anticancer drug that is in a Phase I study for the treatment of metastatic colorectal cancer, glioblastoma, lung, ovarian, cervical, upper gastrointestinal, and pancreatic cancer. Its Orascovery product candidates also comprise Oral Docetaxel and Encequidar, a potent anticancer drug, which is in Phase I clinical study for breast, lung, prostate, gastric, and head and neck cancers; Oral Topotecan and Encequidar, a potent anticancer drug that is Phase I clinical trial to treat lung, ovarian, and cervical cancer; and Oral Eribulin and Encequidar, an intravenous anticancer drug to treat certain patients with breast cancer and liposarcoma. In addition, the company offers Src Kinase product candidates comprising Tirbanibulin ointments for actinic keratosis, skin cancers, and psoriasis; Tirbanibulin Oral for solid and liquid tumors; and KX2-361 for glioblastoma multiforme. Further, it is developing dual absorption enhancers to inhibit the P-gp transporter and the cytochrome P450 enzymes within the gastrointestinal tract; T Cell Receptor Engineered T Cell, cell-based immunotherapy; and PT01 (Peg Arginase), an arginine deprivation therapy product. The company was formerly known as Kinex Pharmaceuticals LLC and changed its name to Athenex, Inc. in August 2015. Athenex, Inc. was incorporated in 2003 and is headquartered in Buffalo, New York.

Jinn Wu is the Founder and President of XenoBiotic Laboratories, Inc. (XBL) in Plainsboro, New Jersey, and XBL- China in Nanjing, China. Both are contract research organizations that provide an extensive array of clinical and preclinical research services to the life sciences, biotechnology and pharmaceutical industries. Jinn earned a Ph.D. in Natural Products and Medicinal Chemistry from the College of Pharmacy, The Ohio State University, and spent seven years as a research leader at FMC Corporation in Princeton, NJ, and made numerous contributions in new products research and development before starting XBL. Jinn has been very active in public services including many non-profit scientific associations and charitable organizations. Dr. Wu was the recipient of The Jack L. Beal Post Baccalaureate Award (1994), College of Pharmacy,

Opinion: Like many development biotechs- it’s a binary outcome. You either lose half your money or so to get in line for 5x returns or more. In the case of ATNX investors have already lost more than half their money. The company is reporting Phase 1 data on paclitaxel with pembrolixumab on a poster study this week Sept 16-21 at the big European cancer meeting.  This might be worth a small flyer.

 

 

Name: Hand Fred
Position: CEO
Transaction Date: 2021-09-13  Shares Bought: 511,387 Average Price Paid: $1.76 Cost: $900,819

Name: Baumann William
Position: CIO
Transaction Date: 2021-09-14  Shares Bought: 100,000 Average Price Paid: $1.71 Cost: $900,819
Company: Tuesday Moning Corp. (TUEM)
Tuesday Morning Corporation is an American discount, off-price retailer specializing in domestic and international designer and name-brand closeout merchandise. The company has stores across the United States. Headquartered in Dallas, Texas, Tuesday Morning was established in 1974. It had grown to 330 stores operating in 35 states by 1998 and 41 states, and 441 stores by 2001. hedge fund Becker Drapkin Management LP bought 6.6% of the company’s stock, which allowed it to gain control of the board of directors. The chain traditionally has relied on direct marketing (including mail and e-mail) and advertises in newspapers. One of the original off-price retailers, Tuesday Morning, is a leading destination for unique home and lifestyle goods. They specialize in name-brand, better/best products for the home. They are known for irresistible finds at an incredible value and search the world for amazing deals to bring to their customers. They are a true off-price retailer, selling high-quality products at prices below those found in boutique, specialty, and department stores. Their customers come to them for an exceptional assortment of brand names at great prices. Their primary merchandise mix includes luxury home textiles, home furnishings, housewares, and seasonal décor. Their customer is a savvy shopper with a discerning taste for quality at a value. With almost 500 stores across the country, They are in the neighborhood in convenient, accessible locations. Their store layout is clean and simple, and that low-frills environment means we can pass even deeper savings on to their dedicated customer base.

Mr. Hand has served as Principal and Chief Operating Officer of Burlington since July 2020 and was responsible for leading its stores and real estate organizations. From January 2017 through July 2020, Mr. Hand served as Chief Customer Officer/Principal and served as Executive Vice President of Stores. Before joining Burlington, Mr. Hand served as Senior Vice President, Group Director of Stores of Macy’s, Inc. from March 2006 to February 2008. From 2001 to 2006, Mr. Hand served as Senior Vice President, Stores and Visual Merchandising of Filene’s Department Stores. Mr. Hand held various other positions at The May Department Stores Company from 1991 to 2001, including Area Manager, General Manager, and Regional Vice President.

Mr. Bill Baumann is a Chief Information Officer & Executive VP at Tuesday Morning Corp. Mr. Baumann was previously employed as a Chief Financial Officer by Burlington Stores, Inc., a Senior Vice President-Information Technology by Recreational Equipment, Inc., and a Chief Information Officer by Torrid, Inc. He received his undergraduate degree from Southern New Hampshire University and an MBA from St. Mary’s College of California.

Opinion:  TUEM is up a whopping 36% after a series of buys by the new management. Tuesday Morning took a dump after reporting its latest quarter. The new management stepped up. I bet they wish they could sell and not be in violation of the SEC short swing rule. which prohibits insiders from trading for a profit within 6 months.

 

Name: He Wei-Wu
Position: CEO Chairman
Shares Bought: 480,000, Average Price Paid: $1.28, Cost: $613,800
Company: CASI Pharmaceuticals Inc. (CASI)
CASI is a U.S. NASDAQ-listed biopharmaceutical company focused on developing and accelerating the launch of innovative therapeutics and pharmaceutical products in China, the U.S., and throughout the world. They have offices in Rockville, Maryland, and a wholly-owned subsidiary in Beijing, China, through which all of their China operations are conducted. CASI is dedicated to developing and delivering high-quality pharmaceutical products and innovative therapeutics to patients worldwide while targeting the China market. They are focused on acquiring, licensing, developing, and commercializing products that address areas of unmet medical need. They intend to become the leading platform to launch medicines in the more significant China market leveraging their China-based regulatory and commercial competencies and their global drug development expertise. They have a strong and growing product pipeline of commercially available and clinical-stage drug candidates and will continue to acquire additional approved and clinical-stage drug candidates through in-license and acquisitions and explore drug candidates in preclinical development.

Dr. He has been Chairman of the Company since February 2012 and Executive Chairman since February 2018, and Chief Executive Officer since 2019. Before joining CASI, Dr. He was involved in founding or funding over 60 biotech companies throughout his career, some of which were 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 before that, was a research fellow at Massachusetts General Hospital and Mayo Clinic.

 

 

Hei, has bought nearly $30 million of CASI stock over the last three years and has paid as high as $3.20 for it. Hei is a significant VC and leading scientist. His latest purchase confirms his conviction and ours. Casi is unique in that is a totally American company, listed in America playing by our accounting standards yet all its operations are in China.  The burgeoning middle class in China represents the greatest opportunity in the fastest-growing pharmaceutical market in the world.

Casi is covered by Mizhu, Oppenheimer, and HC Wainright with price targets of $4 to $6 per share. I think CASI can reach $10-$12 when the anxiety of China’s interference in their capital markets recedes and Casi gets drug approval for CNCT19, the 1st, and only native Chinese CAR T drug. It will be able to massively undercut the price of the competition and will likely lead to significant potential for a buyout of this small relatively undiscovered biotech.

Recap of the conversation I had with the Chief Medical Officer, Alexander A. Zukiwski at Casi Pharmaceutical:  CASI shareholders have been on a wild ride recently. Zukiwki told me that NASDAQ reached out to them inquiring about any corporate activities that could address the 27 million share trading day on 8-23-21. He said they had no idea and couldn’t account for the pick-up in volume last week either.

I suggested that maybe there was a delayed reaction to the news that Novartis partner in China had a CAR T approval.  That came on the back of Gilad approval back in June when China’s drug regulator granted a first CAR T therapy approval to Fosun Kite Biotechnology Co. Ltd.’s FKC-876.

I for one was surprised that there were many CAR T therapies being offered in the Chinese market. Upon further analysis, I found that there are more active CAR T trials in China than even in the U.S. I mentioned this to him and he seemed nonplussed.  He explained that all CAR T-approved drugs will have to be manufactured in China but the process that their competitors are using based upon prior trial approvals in other countries will necessarily be significantly more expensive than CACI’s native process.   Dr. Zukiwki was reluctant to confirm the sub $100k treatment price that analysts have indicated. Perhaps my enthusiasm for CAR T needs to have reigned in a bit but the opportunity for a sub $200 million market cap company like CASI is still striking.  You have to remember that Gilead, Novartis, and Pfizer have paid north of $12 billion each for their CAR T technology investments.

The 90 person salesforce they have built up to market their first approved drug, EVOMELA, was not based on approval of their CAR T efforts with the  Juventas partner.  He said EVOMELA was doing great so this investment in sales will be very leveraged if CAR T gets approved. Unfortunately, the submission for approval is likely a 2022 event.   There is a high probability they will have a CAR-T blood cancer approval in 2022.  That leaves no catalysts that I am aware of for the remainder of the year.

He mentioned that CEO Hei is the smartest man he has ever met and like many geniuses, it’s sometimes hard to keep them focused. I’m not worried by that as Hei has over $30 million reasons to be reminded to keep his eye on the prize.  With CASI Pharmaceuticals you get U.S. GAAP accounting and transparency, nearly a native Chinese pharmaceutical company but with the rigor and scientific respect that a U.S. pharmaceutical engenders. Dr. Zukiwski shared some eye-opening insights about the Chinese market. Chinese people don’t trust medicines made by Chinese pharmaceutical companies.  Many affluent Chinese are going to the U.S. or Europe to get the Covid vaccinations made by Pfizer, Moderna, J&J, etc rather than their homegrown vaccines from  Sinovac and Sinopharm.

CASI takes stakes in many of their JV partners in China so you get a bit of a VC basket in addition to CASI’s own pharmaceutical success.

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Insiders sell the 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 many vendors, and SECForm4 is one of the most customer-friendly and responsive I’ve used.

We publish a subscription newsletter called The Insiders Report.  We offer a free 30-day trial, so you have nothing to lose by trying it out. Be sure to carefully read the TERMS OF SERVICE.

Another source for insider buying and selling and much more is FinViz Elite. FinViz stands for financial visualization, and they do an amazing job of providing reams of data and the tools to help you get to the bottom of it, the information that helps me make informed decisions and probable outcomes. I’ve been using their site for years, and it only gets better over time. We also regularly use Fly on the Wall. I like to know what’s causing a stock to move and Fly is my go-to stop for this intel.

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 are 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 believing 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 me. 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, 4th Best in November 2020, 4th Best in January 2021 (I kid you not)