Curious how well insiders are doing with their buys? Scroll the significant buys of the last year.
We are fully in the nether world of earnings blackout. It’s difficult anytime to discern the mood of corporate America but the period thirty days prior to and one day after quarterly earnings release are deliberately void of any communication about the health of a public company’s business. It’s the blackout period. Not as sexy as a black hole but nonetheless filled with mischieve and potential danger. I’ve asked my friend Dan Taylor of Wharton Forensics Lab and Frank from SECForm4.com to give me a tool that allows me to see insiders establishing 10b5-1 trading plans selling right before their earnings blackout. That would be useful to find the most brazen abuses of insider selling into bad news under the loophole cover of 10b5-1. One takeaway this week, is that when insiders buy big amounts of trashed biotechs, the market is taking notice.
Name: Chugg Juliana L
Position: Director
Transaction Date: 2022-03-28 Shares Bought: 1,925 Average Price Paid: $129.01 Cost: $248,354.00
Company: Darden Restaurants Inc (DRI)
Darden Restaurants, Inc. is a restaurant company that provides full-service dining. Under the trade names Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s Prime Seafood, and The Capital Burger, the company owns and operates full-service dining restaurants in the United States and Canada. In addition, the company operates 25 franchised restaurants in Latin America. Olive Garden, LongHorn Steakhouse, Fine Dining, and Other Business are the four reportable segments. Olive Garden establishments in the United States and Canada make up the Olive Garden section. LongHorn Steakhouse restaurants in the United States are included in the LongHorn Steakhouse category. The Fine Dining segment brands operate within the fine-dining sub-segment of full-service dining. The Other Business segment include remaining brands Cheddar’s Scratch Kitchen, Yard House, Seasons 52, Bahama Breeze, and The Capital Burger restaurants.
From September 2015 to April 2018, Ms. Chugg was the EVP, Chief Brands Officer of Mattel, Inc., a global leader in the design, manufacture, and marketing of toys and family products. She worked as a Senior Vice President of General Mills, Inc. and President of its Frozen Frontier Division until the end of 2014, and had previously held a progression of leadership roles with General Mills and Pillsbury since 1996. Ms. Chugg has served as a director of Kontoor since May 2019 and previously served as a director of H.B. Fuller Company from April 2007 until January 2013 and as a director of Caesars Entertainment Corporation from December 2018 to July 2020.
Opinion: Ironically my Internet company, HomeCom Communications, made Darden’s first websites so even if I don’t eat there very often, I do have a soft spot for them. People are eating out in droves all over the country. There has definitely been some pandemic pent up demand but now that food prices and labor costs are rising- a family is going to temper eating out. Darden’s middle America budget brands should do better than most but I have to think the category is ripe for negative surprises.
Name: O’Sullivan Kieran M
Position: Director
Transaction Date: 2022-03-08 Shares Bought: 5,000 Average Price Paid: $112 Cost: $560,000
Company: LCI Industries (LCII)
Name: Lippert Jason
Position: CEO
Transaction Date: 2022-03-31 Shares Bought: 9,265 Average Price Paid: $108 Cost: $1,000,620.00
Company: LCI Industries (LCII)
Name: Schnur Jamie
Position: President
Transaction Date: 2022-03-31 Shares Bought: 3,250 Average Price Paid: $107.79 Cost: $350,318.00
Company: LCI Industries (LCII)
LCI Industries is engaged in the manufacturing and supplying, domestically and internationally a range of engineered components for the original equipment manufacturer in the recreation and transportation product markets, consisting primarily of recreational vehicles and adjacent industries. The Company’s products include steel chassis and related components; axles and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; entry, luggage, patio, and ramp doors; furniture and mattresses; electric and manual entry steps; awnings and awning accessories; towing products; truck accessories; electronic components, and other accessories. The Company’s segments include the original equipment manufacturers segment (OEM Segment) and the aftermarket segment.
Mr. Kieran M. O’Sullivan is an Independent Director at LCI Industries, a Chairman, President & Chief Executive Officer at CTS Corp. and a President & Chief Executive Officer at CTS Advanced Materials LLC. He is on the Board of Directors at LCI Industries and Lippert Components, Inc. Mr. O’Sullivan was previously employed as an Executive VP-Global Connectivity Business Unit by Continental AG. He received his undergraduate degree from the University of Limerick and an MBA from the University College Dublin.
Jason Douglas Lippert is now the President, Chief Executive Officer, and Director of LCI Industries, as well as the President, Chief Executive Officer, and Director of Lippert Components, Inc., and the Chief Executive Officer and Director of Zieman Manufacturing Co. He also serves on the boards of six other businesses. He was previously the Chairman and Chief Executive Officer of Kinro, Inc.
Schnur joined LCI in 1996 and was instrumental in several of the company’s early technology breakthroughs. Schnur’s teams were responsible for the implementation of LCI’s first Enterprise Resource Planning (ERP) system, as well as several other critical technologies such as Materials Resource Planning (MRP), Electronic Data Interchange (EDI), Advanced Engineering Systems, Customer Resource Management (CRM), and call centre technology, all of which have aided in the company’s tremendous growth over the years and helped it maintain its position as an industry leader. Schnur has helped establish and oversee many teams across the company, including technology, engineering, and customer support, during his time with the company.
Opinion: We have a very large position in THO Thor Industries. All the RV stocks (WBGO, CWH) are near 52 wk lows. Ironically business is great, backlogs are huge but Wall Street is forward-looking and the consensus view is that there was a lot of demand-pull forward with the Pandemic, rising rates will dampen sales, and soaring gas prices will slam the brakes on RV growth. The group trades at some of the lowest multiples in the market. I’m personally betting on Thor as well as the Insiders Fund. We think private equity will do an LBO here with management, wait until gas prices come down, lever up the balance sheet, tune the business and work on the EV transition already started, and rebrand it in an IPO as AirStream, the iconic aspirational brand.
Name: Hollub Vicki A
Position: CEO
Transaction Date: 2022-03-28 Shares Bought: 14,191 Average Price Paid: $56.24 Cost: $798,102.00
Company: Occidental Petroleum Corp (OXY)
Occidental Petroleum Corporation is an energy company. The Company conducts oil and gas exploration and production activities in the United States, the Middle East, and Africa. Within the United States, it has operations in Texas, New Mexico, and Colorado, as well as offshore operations in the Gulf of Mexico. The Company’s business segments include Oil and Gas, chemicals, Midstream, and Marketing. The Oil and Gas segment explores, develops, and produces oil and condensate, natural gas liquids (NGL), and natural gas. The Chemical segment manufactures and markets basic chemicals and vinyl. The Midstream and Marketing segment purchases, markets, gathers, processes, transports, and stores oil, condensate, NGL, natural gas, carbon dioxide (CO2), and power. It also trades around its assets, including transportation and storage capacity, and invests in entities that conduct similar activities. The Midstream and Marketing segment purchases, markets, gathers, processes, transports, and stores oil, condensate, NGL, natural gas, carbon dioxide (CO2), and power.
President and Chief Executive Officer of Occidental Petroleum Corporation and member of Occidental’s board of directors since 2015. Ms. Hollub has worked at Occidental for almost 30 years, holding several managerial and technical positions. She was most recently president and chief operating officer of Occidental Petroleum, where she oversaw the company’s oil and gas, chemical, and midstream activities. She was previously the company’s senior executive vice president and president of Oxy Oil and Gas, where she was in charge of operations in the US, the Middle East, and Latin America. Ms. Hollub is the chair of the US-Colombia Business Council in the United States. She is a member of the American Petroleum Institute and the Khalifa University for Science and Technology in Abu Dhabi’s boards of directors.
Opinion: A lot of people think Buffett will buy the whole company whole lock stock and barrel. I’m in that camp.
Name: Broussard Bruce D
Position: Director
Transaction Date: 2022-03-08 Shares Bought: 6,810 Average Price Paid: $36.67 Cost: $249,723.00
Company: HP Inc (HPQ)
HP, Inc. engages in the provision of personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services. Personal Systems, Printing, and Corporate Investments are the company’s three business segments. For the commercial and consumer markets, the Personal Systems segment offers desktop and notebook personal computers, workstations, thin clients, commercial tablets and mobility devices, retail point-of-sale systems, displays, and other related accessories, as well as software, support, and services. Consumer and commercial printer hardware, supplies, solutions, and services, as well as scanning equipment, are all part of the Printing category. HP Labs and select company incubation programs are included in the Corporate Investments section. William R. Hewlett and David Packard formed the company in 1939, and it is located in Palo Alto, California.
Humana’s President and CEO, Bruce D. Broussard, joined the company in 2011. Humana has developed an integrated care delivery approach based on improving health outcomes, lowering costs, improving quality, and providing a simple and personalized member experience under his leadership. Humana is committed to enhancing the health of the communities it serves by making it easier for people to attain their optimal health through its comprehensive, human care approach. Bruce was the Chief Executive Officer of McKesson Specialty/US Oncology, Inc. before joining Humana. McKesson purchased US Oncology in December 2010. Bruce held several key managerial positions at US Oncology, including Chief Financial Officer, President, Chief Executive Officer, and Chairman of the Board.
Opinion: HP just announced a $4 billion deal HP Inc. (HPQ) announced a definitive agreement to acquire Poly (POLY), a global provider of workplace collaboration solutions, in an all-cash transaction for $40 per share, implying a total enterprise value of $3.3B, inclusive of Poly’s net debt. The stock sold off on this deal and Director Broussard took advantage of that as a buying opportunity.
The company said, “The acquisition accelerates HP’s strategy to create a more growth-oriented portfolio, further strengthens its industry opportunity in hybrid work solutions, and positions the company for long-term sustainable growth and value creation. The rise of hybrid work is creating a sustained demand for technology that enables seamless collaboration across home and office environments. Approximately 75% of office workers are investing to improve their home setups to support new ways of working. Traditional office spaces are also being reconfigured to support hybrid work and collaboration, with a focus on meeting room solutions. Currently, there are more than 90 million rooms, of which less than 10% have video capability. As a result, the office meeting room solutions segment is expected to triple by 2024. Poly will help drive the growth and scale of HP’s peripherals and workforce solutions businesses.
HPQ is a value play, just 6x earnings, and free cash flow. There is a feeling of pull forward demand from the pandemic driving people to buy computers to work at home. It’s hard to get excited by one director purchasing shares while management is awarding themselves all options and unloading stock. I don’t know where this plays into formal stock valuation but it’s not a good emotional backdrop to see management selling much more stock than the director Brousard buying.
Name: Ford William Clay
Position: JR Chairman
Transaction Date: 2022-03-24 Shares Bought: 267,697 Average Price Paid: $16.81 Cost: $4,499,987.00
Company: Ford Motor Co. (F)
Ford Motor Company designs, manufactures, markets, and services a range of Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles worldwide. It operates through three segments: Automotive, Mobility, and Ford Credit. The Automotive segment sells Ford and Lincoln vehicles, service parts, and accessories through distributors and dealers, as well as through dealerships to commercial fleet customers, daily rental car companies, and governments. The Mobility segment designs and builds mobility services; and provides self-driving systems development services. The Ford Credit segment primarily engages in vehicle-related financing and leasing activities to and through automotive dealers. It provides retail installment sale contracts for new and used vehicles; and direct financing leases for new vehicles to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers.
As executive chair of Ford Motor Company, William Clay Ford Jr. is leading the company that put the world on wheels into the 21st century. He joined the board of directors in 1988 and has been its chair since January 1999. Through the years, his vision for the company has remained unchanged. After joining the company in 1979 as a product planning analyst, he held positions in manufacturing, sales, marketing, product development, and finance. During the 1982 Ford-United Auto Workers labor talks, which launched the employee involvement movement that revolutionized the industry, he served on the company’s National Bargaining Team. In 1983 he began a 12-month course of study as an Alfred P. Sloan fellow at the Massachusetts Institute of Technology. He was elected chair and managing director of Ford Switzerland in 1987.
Opinion: It’s good to see the founding family buying instead of selling. I’m not a fan of splitting the company into the EV future leaning company and the remainder, traditional auto. It just shows the frustration of the auto industry seeing Tesla’s enormous valuation- more than all the major carmakers combined. Ford is on the right track and we are big believers at this price. Their EV models are sold out, impossible to keep up with demand. If they can figure out how to make large numbers of them, the stock will be a big hit from this level.
Name: Farner Jay
Position: CEO
Transaction Date: 2022-03-08 Shares Bought: 22,000 Average Price Paid: $11.10 Cost: $244,215.00
Company: Rocket Companies Inc (RKT)
Rocket Companies, Inc. is a holding company with interests in real estate, mortgage lending, and eCommerce. Rocket Platform is a service provided by the company. Direct to Consumer and Partner Network are two of its segments. Performance marketing and direct engagement through its Rocket Mortgage application are part of its Direct to Consumer strategy. Clients in the Direct-to-Consumer segment can connect with the Rocket Mortgage application or the Rocket Cloud Force, which consists of sales team members spread over the platform. Its Partner Network is a collaboration with leading consumer-focused businesses, brokers, and mortgage specialists who use its platform and scale to offer mortgage solutions to their customers. The Rocket Professional platform helps the company’s Partner Network, which uses its client service and well-known brand to create marketing and influencer relationships, as well as its mortgage broker alliances through Rocket Pro third-party origination (TPO).
Rocket Companies’ Chief Executive Officer and Director are Jay Farner. Since 1996, he has worked for Quicken Loans and has held senior leadership positions since 1999. Jay was President and Chief Marketing Officer before being promoted to CEO in 2017. He is also the Chief Executive Officer and Director of RHI and its subsidiaries. Jay sits on the boards of Detroit Labs, LLC, Community Solutions, StockX, Bedrock Manufacturing, the Metropolitan Detroit YMCA, Bizdom Fund, and Rocket Giving Fund, among others.
Opinion: Rocket has been a loser out of the box since its IPO. They were already the largest player in the mortgage market when they went public. I think the consensus opinion which appears right as the mortgage market had peaked and rising rates, home saturation, and the refinance binge was all behind the company. It will take more than a few thousand shares of buying by Jay Farmer to make up for the $billion dollars of stock sold the previous day by the Gilberts.
Name: Holdsworth Mark Keith
Position: Director
Transaction Date: 022-03-29 Shares Bought: 50,000 Average Price Paid: $7.20 Cost: $360,135.00
Company: R F Industries Ltd. (RFIL)
RF Industries, Ltd., together with its subsidiaries, designs, manufactures, and markets interconnect products and systems in the United States, Canada, Mexico, and internationally. The company operates through two segments, RF Connector and Cable Assembly and Custom Cabling Manufacturing and Assembly. The company’s RF Connector and Cable Assembly segment designs manufacture and distribute coaxial connectors and cable assemblies that are integrated with coaxial connectors. The Custom Cabling Manufacturing and Assembly segment designs manufacture, markets, and distribute custom copper and fiber cable assemblies, complex hybrid fiber optic and power solution cables, energy-efficient cooling systems for wireless base stations and remote equipment shelters, and custom-designed pole-ready 5G small cell integrated enclosures. It also manufactures and sells custom and standard cable assemblies, hybrid fiber optic power solution cables, adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive, and medical equipment. In addition, the company designs and manufactures cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation, and military customers.
Mark K. Holdsworth serves as Independent Director of the Company. Mr. Holdsworth is the Founder and Managing Partner of Holdsworth Group, LLC, which he founded in 2019. From 1999 to 2018, Mr. Holdsworth was a Co-Founder, Managing Partner, and Operating Partner of Tennenbaum Capital Partners, LLC (“TCP”), a Los Angeles-based private multi-strategy investment firm that was acquired by BlackRock, Inc. in August 2018, and was a Managing Director at BlackRock until April 2019. Additionally, Mr. Holdsworth is the Founder of Holdsworth & Co., LLC, a private family office. Mr. Holdsworth has almost 20 years of board experience and specializes in active management oversight, strategy, M&A activity, and complex financings. He has also served as a board director or board chairperson of several public and private companies in a variety of industries.
Opinion: I’m lukewarm on this and don’t see what Holbrook is buying but he is buying a lot of it. This is his 8th purchase since April 2021. The company is growing nicely and perhaps that will flow to the bottom line.
Name: Chacko Jacob
Position: CEO
Transaction Date: 2022-03-23 Shares Bought: 350,000 Average Price Paid: $4.92 Cost: $1,723,708.00
Company: Oric Pharmaceuticals Inc (ORIC)
ORIC Pharmaceuticals Inc. is a clinical-stage biopharmaceutical company focused on improving patients’ lives by overcoming resistance in cancer. By using its experience in three specific areas: hormone-dependent tumours, precision oncology, and major tumour dependencies, the Company is focused on building a varied pipeline of medicines tailored to overcome resistance mechanisms in cancer. ORIC-101, ORIC-533, ORIC-944, and ORIC-114 are some of the product prospects. ORIC-101 is a strong and selective small-molecule antagonist of the glucocorticoid receptor (GR), which has been related to drug resistance in a number of solid cancers. ORIC-533, the company’s second product candidate, is an orally accessible, small-molecule inhibitor of CD73, a critical node in the adenosine pathway that contributes to resistance to chemotherapy and immunotherapy. Its ORIC-944 is being developed as a treatment for prostate and breast cancer.
Dr. Chacko was most recently CFO of Ignyta, a NASDAQ-listed precision oncology company acquired by Roche in February 2018. He had a broad operational role at Ignyta and assisted in the raising of nearly $500 million in cash. During his time in office. Dr. Chacko was an investor at TPG Capital before joining Ignyta. He was a board observer for Par Pharmaceutical, IMS Health, and Quintiles Transnational and served on the boards of directors of RentPath and EnvisionRx. He previously served on the Packard Children’s Health Alliance board of directors at Stanford’s Lucile Packard Children’s Hospital. He presently serves on the boards of directors of Bonti and AROG Pharmaceuticals, as well as chairing the Marshall Scholarship Western Regional Selection Committee.
Opinion: Oric soared 34% on this insider buy trading below the cash on the company’s books. This has been a vicious biotech bear market and the whole sector showed life last week. Oric is an early-stage company and will take years and lots of money to find out if its approach to overcoming cancer pays out.
Name: Verstandig Grant
Position: Director
Transaction Date: 2022-03-24 Shares Bought: 190,600 Average Price Paid: $3.94 Cost: $750,274.00
Company: NexImmune Inc (NEXI)
NexImmune, Inc is a biotechnology startup in the early stages of development. The company is working on a unique immunotherapy strategy that uses the body’s own T cells to induce an immune response that is similar to natural biology. Artificial Immune Modulation (AIM) is a nanoparticle technology platform provided by the company. Its AIM technology allows it to make nanoparticles that act like synthetic dendritic cells and can drive a specific T cell-mediated immune response. Signaling proteins are used by the AIM nanoparticles to give instructions to T cells to direct a desired immunological response. Its T cell product candidates are intended to combine the benefits of cells with a lower risk of toxicity. NEXI-001 and NEXI-002, the company’s two key products, are in Phase 1/2 clinical studies for the treatment of recurrent acute myeloid leukemia (AML) following allogeneic stem cell transplantation and multiple myeloma refractory to lines of therapy, respectively.
Mr. Verstandig is the Executive Chairman and Co-Founder of Epirus, a fast-growing technology firm that develops directed energy systems and power management solutions for a variety of applications and missions. Mr. Verstandig is a philanthropist, entrepreneur, and venture capital investor. Mr. Verstandig started Rally Health, a consumer-centric digital health firm, at the age of 21. Rally Health’s web and mobile solutions enable millions of individuals to take charge of their health and well-being, as well as manage their health care needs. Rally was acquired by UnitedHealth in 2017. Mr. Verstandig previously worked at UnitedHealth Group, one of the world’s largest diversified healthcare conglomerates.
Opinion: Read the above comments on ORIC. NEXI bouned 14% on this insider buy. These are both large buys and it’s time to start focusing on biotech that management is willing to put significant dollars of their own behind.
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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 a lot of vendors. SECForm4 is one of the smaller ones but I like supporting Frank. He is not arrogant. He’s helpful and has great prices. He also trades on his own data so I like people that eat what they kill.
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.
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. It’s just one piece of the investor’s due diligence. The Insiders Fund blog informs you of the purchases that count. As a rule, we only look at material amounts of money as anything less could just be window dressing.
The bar is different from selling because the natural state of management is to be sellers. This is because most companies provide significant amounts of management compensation packages as stock and options. Therefore, with selling, we analyze for unusual patterns, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52-week lows. Another red flag is large planned sale programs that start without warning. Unfortunately, the public information disclosure requirements about these programs referred to as Rule 10b5-1 is horrendously poor. Also planned sales that just pop up out of nowhere are basically sales and are seeking cover under the Sarbanes Oxley corporate welfare clause. I also generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and perhaps not the smart money we are trying to read the tea leaves on.
Of course, insiders can also be wrong about their Company’s prospects. Don’t let anyone fool you into believing they never make mistakes. Do your own analysis. They can easily be wrong about, 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!
We like Fly on the Wall for keeping up with what events might be happening, analysts comment, and whatever else could be moving the stock. Dow Jones news service is an essential tool but many services pick up their feed like they do Bloomberg. For quick financial analysis, it’s hard to beat Old School Value.
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. 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
