Curious how well insiders are doing with their buys? Scroll through the significant buys of the last year.
It’s nice being right. It’s better to make money at it. We did both last week. Over the last two weeks, I’ve mentioned the market seemed to be discounting bad news as many stocks stopped going down on lackluster earnings. Well, last week, it broke out into a full bull on rampage. The S&P 500 rose 4.08% on the week, and on Wednesday, when the Fed announced a 3/4/% interest rate hike, the NASDAQ spiked up 4.1%, its biggest move since 2020. When I looked at my screen at how the Fed futures were acting, I was stunned; the long bond was up 2/14 points, maybe the largest move in memory, a giigantic move up when rates should be going the other way. Maybe that’s what it’s really all about. The big bad Fed is a paper tiger.
Behind the scenes, the drumbeats of war grow ever louder. Russia is starving Germany and Europe of gas as it prosecutes the war in Europe. This is the 800-pound gorilla that dwarfs all other economic concerns. This will only grow more apparent as we squander valuable time and resources, giving Ukraine enough weapons and help to fight but not enough to win. I believe we should be instituting a draft now as, after 50 years since we had one, we shouldn’t underestimate the will of China and Russia. They wish us no goodwill, and the weapons we are donating to Ukraine are coming out of our own stockpile, according to the CEO of Lockheed Martin. The world is weaponing up and we better wake up.
Name: Stallings Robert W
Position: Director
Transaction Date: 2022-07-22 Shares Bought: 42,000 Average Price Paid: $56.57 Cost: $2,375,940
Transaction Date: 2022-07-26 Shares Bought: 21,000 Average Price Paid: $56.64 Cost: $1,189,420
Company: Texas Capital Bancshares Inc. (TCBI)
Texas Capital Bancshares, Inc. is a full-service financial services organization that provides tailored solutions to businesses, entrepreneurs, and individual consumers. Commercial banking, consumer banking, investment banking, and wealth management are all services provided by the organization. It provides commercial deposit accounts, lockbox accounts, and cash concentration accounts, as well as information, wire transfer initiation, ACH initiation, account transfer, and service integration services; and consumer deposit accounts, such as checking accounts, savings accounts, money market accounts, and certificates of deposit. It serves the Texas urban regions of Austin, Fort Worth, Dallas, Houston, and San Antonio. Texas Capital Bancshares, Inc. is based in Dallas, Texas, and was founded in 1996.
Stallings, Robert William Texas Capital Bancshares, Inc., Independent Director Robert William Stallings, the founder of ING Pilgrim Capital Corp., is a businessman who has led five different firms and is Chairman & Chief Executive Officer of Stallings Capital Group, Inc. Texas Capital Bancshares, Inc., MGA Insurance Co., Inc., Texas Capital Bank NA, and Crescent Realty, Inc. are all on Mr. Stallings’ board of directors. Mr. Stallings has previously served as Trust Manager at Crescent Real Estate Holdings LLC, Executive Chairman and Chief Strategic Officer at GAINSCO, Inc., Chairman and Chief Executive Officer of Resource Bank, NA (Dallas, Texas), Chairman of ING Pilgrim Capital Corp., and Chief Executive Officer of Pilgrim Capital Corp. Johnson & Wales University, Inc. awarded Robert William Stallings an undergraduate degree.
Opinion: I have no idea why Stallings is loading up on TCBI, and loading up he is. From everything I read, it’s a shitty bank, worse than an also-ran, and pays no dividend. Yet Stallings is buying. What does he know that the smart minds at JP Morgan have it underweight (that’s Wall St parlance for a sell)? Stallings has started five companies, according to his bio, the analyst at JP Morgan doesn’t disclose, but you can bet the farm he doesn’t have five businesses.
Name: Milikin Maurice Anthony
Position: Chief Supply Chain Officer
Transaction Date: 2022-07-25 Shares Bought: 12,979 Average Price Paid: $36.72 Cost: $476,589
Company: Keurig Dr Pepper Inc. (KDP)
With annual revenue is a leading beverage company in North America. KDP is a market leader in soft drinks, specialty coffee and tea, water, juice, juice drinks, and mixers, as well as the #1 single-serve coffee brewing machine in the United States and Canada. Keurig®, Dr. Pepper®, Green Mountain Coffee Roasters®, Canada Dry®, Snapple®, Bai®, Mott’s®, CORE®, and The Original Donut Shop® are among the Company’s more than 125 owned, licensed, and partner brands, which are designed to meet almost any customer demand, at any moment. KDP can bring its line of hot and cold beverages to practically every point of purchase for consumers, thanks to its extensive sales and distribution network. The Company is committed to sourcing, producing, and distributing its beverages responsibly through its Drink Well. The company, formerly Dr. Pepper Snapple Group, is one of North America’s largest beverage companies, with more than 125 owned, licensed, and partner brands. It owns the top single-serve coffee system in the US (Keurig) and one of the US’s leading soft drinks (Dr. Pepper).
Tony Milikin is Keurig Dr. Pepper’s Chief Supply Chain Officer. He is in charge of the Company’s whole supply chain, including production, procurement, logistics, warehousing, transportation, and quality, as well as the environment, health, and safety. Prior to joining KDP in 2021, he was Chief Procurement, Sustainability, and Circular Ventures Officer at Anheuser-Busch InBev, where he was in charge of 70 vertical operations sites. Tony formerly served as MeadWestvaco’s Senior Vice President of Supply Chain, bringing more than 30 years of worldwide expertise in supply chain management. Tony has a master’s degree in business administration from Texas Christian University and a bachelor’s degree in business administration from the University of Florida.
Opinion: I think I have this one figured out. It’s a steady 8% grower, 11% with dividends over the last three years on a solid mix of brands that are not disappearing and have moderate growth. It doesn’t suck.
Name: Shapiro Edward
Position: Director
Transaction Date: 2022-07-25 Shares Bought: 50,000 Average Price Paid: $35.74 Cost: $1,787,023
Company: United Airlines Holdings Inc. (UAL)
United Airlines Holdings, Inc. operates air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America through its subsidiaries. The company’s mainline and regional fleets convey people and goods. It also provides third-party catering, ground handling, training, and maintenance services. United Continental Holdings, Inc. was the company’s previous name until June 2019, when it was renamed United Airlines Holdings, Inc. United Airlines Holdings, Inc. is based in Chicago, Illinois, and was founded in 1968.
From 1999 until 2016, Mr. Shapiro was the Managing Partner of PAR Capital Management, Inc., a Boston-based investment management business concentrating on travel, media, and Internet-related firms. Mr. Shapiro was previously a Vice President at Wellington Management Company and an Analyst at Morgan Stanley & Co. before joining PAR Capital. Mr. Shapiro sat on the boards of Global Eagle Entertainment, US Airways, Web.com, Lumexis Corporation, and Sonifi Solutions in the past (formerly LodgeNet Interactive Corporation). Mr. Shapiro graduated from the University of Pennsylvania’s Wharton School with a bachelor’s degree in economics and an MBA from UCLA’s Anderson School of Management.
Opinion: It’s funny it wasn’t so long ago that the world’s most famous investor had a new flung lover for airlines after years of forswearing them. Buffett abruptly changed his mind when the Pandemic seemed to raise the toll of the industry. He’s not been proven wrong but he’s not been proven right either. The airlines are gushing cash at the moment with high oil, lack of help, and overwhelming demand. That sounds like a pretty good business model to me. Veteran Ed Shapiro probably knows the business better than Buffett since it’s been a long time since Buffet ran one.
Name: Chirico Emanuel
Position: Director
Transaction Date: 2022-07-25 Shares Bought: 30,000 Average Price Paid: $34.06 Cost: $1,021,800
Company: Conagra Brands Inc (CAG)
In North America, Conagra Brands, Inc. and its subsidiaries run a consumer packaged goods and food business. Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice, are the company’s four business segments. In the United States, the Grocery & Snacks division principally provides shelf-stable food goods through a variety of retail channels. Temperature-controlled food items are offered in the United States through a variety of retail channels in the Refrigerated & Frozen sector. The International sector provides food items through retail and food service channels outside of the United States in a range of temperature states. For restaurants and other foodservice operations in the United States, the Foodservice industry provides branded and personalized food goods, such as meals, entrees, sauces, and different custom-manufactured culinary products. Birds Eye, Duncan Hines, Healthy Choice, Marie Callender’s, Reddi-Wip, Slim Jim, Angie’s BOOMCHICKAPOP, Duke’s, Earth Balance, Gardein, and Frontera are just a few of the names that the corporation offers its goods under. ConAgra Foods, Inc. was the company’s previous name; in November 2016, it changed to Conagra Brands, Inc. Founded in 1861, Conagra Brands, Inc. has its corporate headquarters in Chicago, Illinois.
The 63-year-old experienced executive Manny Chirico has a proven track record of increasing shareholder value. Currently, Mr. Chirico serves as chairman and CEO of PVH Corp., one of the most renowned fashion and leisure businesses in the world, which employs approximately 40,000 people and conducts business in 40 nations. Calvin Klein, TOMMY HILFIGER, Van Heusen, ARROW, Warner’s, and IZOD are a few of PVH’s well-known brands. In his more than 25 years with PVH, he has held a variety of executive positions, including CEO since 2006 and Chairman since 2007. On February 1st, 2021, he will step down from his position as CEO of PVH. Mr. Chirico led the Retail and Apparel Practice Group at the global accounting firm Ernst & Young before joining PVH. Since 2003, he has been a director of Dick’s Sporting Goods, Inc. From Fordham University, where he is a trustee, Mr. Chirico received a bachelor’s degree in accounting and finance.
Opinion: Another safe consumer products bets for a very rich man, Manny Chrico
Name: Jones Thomas W
Position: Director
Transaction Date: 2022-07-25 Shares Bought: 40,000 Average Price Paid: $31.21 Cost: $1,248,444
Company: Jefferies Financial Group Inc. (JEF)
In the Americas, Europe, the Middle East, Africa, and Asia, Jefferies Financial Group Inc. operates activities in investment banking, capital markets, and asset management. The business operates in the Asset Management, Corporate, Merchant Banking, Investment Banking and Capital Markets areas. It offers corporate loans, equity and debt underwriting, advisory services for mergers and acquisitions, restructurings or recapitalizations, and private capital advising activities. The business also provides wealth management services, financing, securities lending, and other prime brokerage services. It also provides stocks research and finance. Additionally, it offers clients sales and trading of investment-grade corporate bonds, government and agency securities from the United States and Europe, municipal bonds, mortgage- and asset-backed securities, leveraged loans, consumer loans, high-yield and distressed securities, emerging markets debt, interest-rate, and credit derivative products, as well as the execution of foreign exchange trades and securitization.
Thomas W. Jones serves as the company’s only independent director. In August 2015, Mr. Jones was appointed as a director of AGL. The senior partner and company founder of the venture capital business TWJ Capital LLC is Mr. Jones. He was the CEO of Citigroup Global Investment Management, which includes Citigroup Asset Management, Citigroup Alternative Investments, Citigroup Private Bank, and Travelers Life & Annuity, prior to creating TWJ Capital in 2005. He formerly held a number of positions at TIAA-CREF, including vice chairman, director, president, and chief operating officer. He also had a number of positions at John Hancock Mutual Life Insurance Company, rising to senior vice president and treasurer. He began his career mostly with Arthur Young & Company in public accounting and management consultancy (predecessor to Ernst & Young). Emeritus trustee of Cornell University, Mr. Jones, has held various positions on boards in the past, including vice chairman of the Federal Reserve Bank of New York, Altria Group, Freddie Mac, Travelers Group, Fox Entertainment Group, and Pepsi Bottling Group, and TIAA-CREF.
Opinion: Wow, the only independent director did I just read? This man knows an undervalued investment bank when he sees one.
Name: Dumais Michael R
Position: Director
Transaction Date: 2022-07-21 Shares Bought: 10,000 Average Price Paid: $24.39 Cost: $243,900.00
Company: Baker Hughes Co (BKR)
A variety of technology and services are offered by Baker Hughes Company to the global energy and industrial value chain. Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions make up its four operating sectors (DS). The OFS segment provides drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas, as well as oilfield service companies. It also offers exploration, drilling, wireline, evaluation, completion, production, and intervention services. The OFE segment offers surface and subsea wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions.
The National Association of Manufacturers and Baker Hughes Co. both have Michael R. Dumais on their boards. He previously served as a principal at Bain & Co., Inc., chief transformation officer and executive vice president at Raytheon Technologies Corp., president of Hamilton Sundstrand Corp., executive vice president for operations and strategy at United Technologies Corp., and president of power, controls, and sensing systems at UTC Aerospace Systems (all of which are divisions of Raytheon Technologies Corp.). He also held the positions of systems engineer at GE Aerospace, Inc., and principal at Bain & Co. Michael R. Dumais earned his MBA from The Wharton School of the University of Pennsylvania as well as graduate degrees from the University of Pennsylvania and Virginia Polytechnic Institute & State University.
Opinion: No brainer we are going to drill for more hydrocarbons in a big way. But GE is sitting on the bid promising to diverse Baker Hughes. If they change their mind, expect GE and Baker Hugues to pop big.
Name: Torgow Gary
Position: Director
Transaction Date: 2022-07-27 Shares Bought: 19,382 Average Price Paid: $12.90 Cost: $249,975
Company: Huntington Bancshares Inc (HBAN)
The Huntington National Bank offers commercial, consumer, and mortgage banking services in the United States, and Huntington Bancshares Incorporated serves as the bank holding company for this institution. The business is divided into four segments: regional banking, vehicle finance, consumer and business banking, and The Huntington Private Client Group (RBHPCG). The consumer and business banking section provides a range of financial services and goods, including credit cards, consumer and small business loans, certificates of deposit, checking and savings accounts, money market accounts, and investment products. The services offered by this section also include online, mobile, and telephone banking, as well as mortgages, insurance, interest rate risk protection, foreign currency, and treasury management. Both consumers and small businesses are served. The Commercial Banking segment provides regional commercial banking solutions for middle market companies, public sector organizations, commercial real estate developers/REITs, as well as specialty banking solutions for healthcare, technology and telecommunications, franchise finance, sponsor finance, and international services sectors.
In June 2021, Mr. Torgow was appointed to the position of chairman of Huntington Bank’s board of directors. From September 2016 until the TCF merger in June 2021, he served as executive chairman of TCF (formerly known as Chemical Financial Corporation), and he also served as executive chairman of Talmer Bancorp Inc. until its merger with Chemical Financial Corporation in August 2019. Mr. Torgow developed and served as chairman of the Sterling Group, a Michigan-based real estate, development, and investment firm, prior to joining Talmer. Both DTE Energy Company and Blue Cross Blue Shield of Michigan include Mr. Torgow as a director. He is a member of the executive board of Business Leaders of Michigan, a trustee for the Community Foundation for Southeast Michigan, and the board of trustees for Beaumont Health. Mr. Torgow serves on the boards of both the Skillman Foundation and the Detroit Regional Partnership. Additionally, he holds the position of board president for Yeshiva Beth Yehudah school and chairman of Mosaic United.
Opinion: Gee, if I got appointed to the Chairman of the Board at a large regional powerhouse bank, I’d buy more than likely board of directors salary.
Name: Nader Francois
Position: Director
Transaction Date: 2022-07-19 Shares Bought: 138,500 Average Price Paid: $3.61 Cost: $500,020
Company: Talaris Therapeutics Inc. (TALS)
Talaris Therapeutics, Inc. is a cell treatment firm in the late stages of development based in the United States. The business is working on creating an allogeneic hematopoietic stem cell transplantation technology that will revolutionize solid organ transplantation, severe autoimmune illnesses, and severe non-malignant blood, immunological, and metabolic problems. FCR001, a new allogeneic cell treatment in Phase II trial for live donor kidney transplant patients, is the company’s principal product candidate. FCR002 is also being developed for dead donor kidney transplants; FCR001 is being developed for individuals with a severe type of scleroderma; and FCR001 is being developed for one or more severe non-malignant blood, immunological, or metabolic problems. Talaris Therapeutics, Inc. was established in 1988 and is based in Louisville, Kentucky.
The chairman of Talaris Therapeutics (TALS), Benevolent AI (BAI), and Neurvati Neurosciences is now Francois Nader, MD, MBA. Additionally, he is a senior adviser to Blackstone Life Sciences and a board director for Moderna (MRNA), RING Therapeutics, and both companies. Dr. Nader formerly held the position of NPS Pharma’s CEO. Dr. Nader built NPS Pharma into a top worldwide biotechnology business during his leadership, with an emphasis on providing patients with novel treatments for rare diseases. The Ernst and Young National Life Science Entrepreneur of the Year® honor were given to Dr. Nader in 2013. Dr. Nader is a board member of the American Task Force for Lebanon and a trustee of the Lebanese American University. Dr. Nader was a venture partner at Care Capital prior to joining NPS. He formerly held a variety of executive positions, including senior vice-president, integrated healthcare markets, and North America medical and regulatory affairs, while serving on the North America Leadership Team of Aventis and its predecessor businesses. Prior to this, he oversaw the global commercial activities for Rhone-Pasteur Poulenc’s Vaccines division.
Opinion: This was a rocket ship up 23% since Director Nadar purchased shares. Not many biotechs move like that this year.
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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 within 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.
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, 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’ comments, 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
