“All good things come to an end,” so the saying goes. They don’t all come to an end bumping up against the 200-day moving average, though. The historic run in the market began to look just like a bear market rally with Friday’s across-the-board sell-off. The market notched its first losing week in the last five. This week had something very everyone. Short sellers got slaughtered betting against Carvana and Cassava but got their reprieve with the news that Ryan Cohen dumped his Bed Bath and Beyond. BBBY cratered 40%, meme stocks like AMC and GameStop got crushed, and Bitcon lost 8% on Friday alone.
The Fed’s July meeting minutes released this week said what everyone already knows. Inflation is too high. They made clear the central bank will keep raising interest rates. The central bank has raised interest rates twice this year by 0.75 percentage points, triple its usual margin. Forecasters currently expect a hike of a half-percentage point at the board’s next meeting, although certain governors and spokesmen said that 0.75% was fine by them. It’s deja-vu all over. The SPY ETF hit 430 and turned tail like clockwork.
Insiders continue to buy the most unusual and potential money-making trade I’m saving to last. Miss it at your loss. Don’t confuse the Insiders Report with The Insiders Fund. I write one and invest in the other. We explicitly inform you of this, and we may or may not be long, short, or have any position at all in the securities we comment on, although it should be obvious we prefer to invest in companies where insiders have bought material amounts with their own money at or near prices the general public can buy at. Anyone can lose money in the market but lose money in the stocks that insiders are unloading as fast as they can; well, that’s on you.
Name: Tai Jackson P
Position: Director
Transaction Date: 2022-08-12 Shares Bought: 656 Average Price Paid: $304.19 Cost: $199,549.00
Company: Eli Lilly & Co. (LLY)
Since the Company’s inception in May 1998, Remi Barbier has served as President, Chief Executive Officer, and Chairman of the Board of Directors. Mr. Barbier previously assisted in the growth or founding of Exelixis Inc., a publicly traded drug development company, ArQule, Inc., a drug development company acquired by Merck & Co., and EnzyMed, Inc., a chemistry company sold to Albany Molecular Research, Inc. Mr. Barbier is an emeritus trustee of the Carnegie Institute of Washington, the Santa Fe Institute, and the University of California Institute for Quantitative Biosciences’ Advisory Board. He serves on the board of BioVentures LLC, the University of Arkansas for Medical Sciences’ life science incubator. Alimta is available for non-small cell lung cancer (NSCLC) and malignant pleural mesothelioma; Cyramza is available for metastatic gastric cancer, and gastro-esophageal junction adenocarcinoma, metastatic NSCLC, metastatic colorectal cancer, and hepatocellular carcinoma; Erbitux is available for colorectal cancers and various head and neck cancers.
Jackson P. Tai, former vice chairman, and chief executive officer of DBS Group Holdings Ltd and DBS Bank Ltd, was elected to the board of directors of Eli Lilly and Company in 2013. Tai became a chief financial officer of DBS Group and DBS Bank (formerly the Development Bank of Singapore) in 1999, one of Asia’s largest financial services groups. From 2001 to 2002, he was president and chief operating officer of DBS, and from 2002 to 2007, he was vice chairman and chief executive officer. Tai worked as an investment banker for J.P. Morgan & Co. from 1974 to 1999. Tai founded the firm’s Japan capital markets business in Tokyo, founded the firm’s global real estate investment banking business in New York, served as the firm’s senior officer for the Asia Pacific in Tokyo, and served as the firm’s senior officer for the Western United States in San Francisco while at J.P. Morgan.
Opinion: This looks like a perfunctory director-type buy, although it appears to be well-timed. Lilly probably sold off with big pharma as the Inflation Reduction act rhetoric once again showed that Congress’s bark is greater than its bite. Pharma seems to have dodged most of the damage from the Medicare negotiating threat.
Name: Gates William H III
Position: 10% Owner
Transaction Date: 2022-08-11 Shares Bought: 185,129 Average Price Paid: $171.80 Cost: $31,805,058.00
Company: Ecolab Inc. (ECL)
A trusted partner at nearly three million customer locations, Ecolab (ECL) is the global leader in water, hygiene, and infection prevention solutions and services. Ecolab delivers comprehensive solutions, data-driven insights, and personalized service to advance food safety, maintain clean and safe environments, optimize water and energy use, and improve operational efficiencies and sustainability for customers in the food, healthcare, hospitality, and industrial markets in more than 170 countries around the world. Our innovative products and services are used in hospitals, hotels, restaurants, schools, manufacturing plants, refineries, and other locations. Many of the world’s most recognizable brands rely on Ecolab to help ensure operational efficiencies, product integrity, and brand reputation. When you come to work at Ecolab, you get to take on some of the world’s most meaningful challenges and have the opportunity to learn and grow, shape your career, make an impact and quickly see the importance of your work.
At the age of 13, Bill Gates wrote his first software programme. In high school, he co-founded Traf-O-Data, a company that marketed traffic-counting systems to municipal governments, with a group of programmers who digitized their school’s payroll system. In 1975, while still a student at Harvard, Gates teamed up with a buddy from his hometown, Paul G. Allen, to create software for the earliest microcomputers. They started by converting BASIC, a popular programming language for large computers, to a microcomputer-friendly version. With the success of this effort, Gates dropped out of Harvard during his junior year and co-founded Microsoft with Allen. When Microsoft licensed an operating system called MS-DOS to International Business Machines Corporation—then the world’s largest computer supplier and industry pacesetter for use on its first microcomputer, the IBM PC, Gates’ clout in the baby microcomputer industry grew significantly (personal computer). IBM swiftly established the technical standard for the PC market after its debut in 1981, and MS-DOS pushed out competing operating systems.
Opinion: The world’s near richest man has a challenge diversifying all that wealth. I wouldn’t read too much into this purchase, although I’m sure Cascade’s investment manager wants to please their boss.
Name: Milikin Maurice Anthony
Position: Chief Supply Chain Officer
Transaction Date: 2022-08-15 Shares Bought: 12,979 Average Price Paid: $39.85 Cost: $517,213.00
Company: Keurig Dr Pepper Inc. (KDP)
With annual revenue, it 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).
With more than 30 years of experience in supply chain management, Milikin joins KDP. He most recently served as Anheuser-Busch InBev’s Chief Procurement, Sustainability, and Circular Ventures Officer. In that role, he was responsible for overseeing 70 manufacturing facilities, a significant environmental agenda, and the global procurement budget for one of the biggest brewers in the world.
Opinion: The insiders keep buying. I’d love to get my hands on this Company’s mandatory executive ownership plan.
Name: Robertson Sanford
Position: Director
Transaction Date: 2022-08-12 Shares Bought: 100,000 Average Price Paid: $20.69 Cost: $2,069,000.00
Company: Cassava Sciences Inc. (SAVA)
Cassava Sciences, Inc. is a clinical-stage biotechnology company that creates drugs to treat neurodegenerative diseases. Its lead therapeutic product candidate, simufilam, is a small molecule drug that has completed a Phase 2b clinical trial, and its investigational diagnostic product candidate, SavaDx, is a blood-based biomarker/diagnostic for Alzheimer’s disease. In March 2019, the company changed its name from Pain Therapeutics, Inc. to Cassava Sciences, Inc. Cassava Sciences, Inc. was founded in 1998 and is headquartered in Austin, Texas.
Since the Company’s inception in May 1998, Remi Barbier has served as President, Chief Executive Officer, and Chairman of the Board of Directors. Mr. Barbier previously assisted in the growth or founding of Exelixis Inc., a publicly traded drug development company, ArQule, Inc., a drug development company acquired by Merck & Co., and EnzyMed, Inc., a chemistry company sold to Albany Molecular Research, Inc. Mr. Barbier is an emeritus trustee of the Carnegie Institute of Washington, the Santa Fe Institute, and the University of California Institute for Quantitative Biosciences’ Advisory Board. He serves on the board of BioVentures LLC, the University of Arkansas for Medical Sciences’ life science incubator.
Opinion: The moment I noticed this SAVA purchase, it was up 20%. I tagged on a couple of points, but I’m not a fan of chasing manias. I blogged extensively about Cassava. I made an epic 12X my investment in a few months. I’m not a believer in lightning striking twice in the same place. Short sellers have had a bad run lately with Carvana and now Cassava?
The Company released a press report absolving themselves of criminal behavior in a well-regarded scientific journal. Three days earlier, Director Robertson filed a Form 4. Are you kidding me? If this isn’t trading on inside information, I’d like someone to school me.
Explanation of Responses:
I think I’d take a flyer on Cassava after a few days of basing. The fast-money crowd usually moves on as their capital is limited. Then again, legendary Sanford Robertson is so old he may well be into cognitive decline or just funding his own drug trials for all I know. I’m watching to see Remi pony up his money. There is a long way to go on this road to FDA approval for an Alzheimer’s drug.
Name: Goncalves Celso L Jr
Position: CFO
Transaction Date: 2022-08-16 Shares Bought: 5,000 Average Price Paid: $19.36 Cost: $96,800.00
Transaction Date: 2022-08-17 Shares Bought: 6,000 Average Price Paid: $18.43 Cost: $110,579.00
Company: Cleveland-Cliffs Inc. (CLF)
Cliffs is the largest flat-rolled steel producer in North America. Founded in 1847 as a mine operator, They are also the largest supplier of iron ore pellets in North America. In 2020, They acquired two major steelmakers, AK Steel and ArcelorMittal USA, vertically integrating their legacy iron ore business with quality-focused steel production and emphasis on the automotive end market. Their fully integrated portfolio includes custom-made pellets and HBI; flat-rolled carbon steel, stainless, electrical, plate, tinplate and long steel products; as well as carbon and stainless steel tubing, hot and cold stamping and tooling. Headquartered in Cleveland, Ohio, They employ approximately 25,000 people across their mining, steel and downstream manufacturing operations in the United States and Canada. Cleveland-Cliffs has been traditionally recognized as the largest and oldest independent iron ore mining company in the United States.
Executive Vice President and Chief Financial Officer is Mr. Celso L. Goncalves. With executive responsibility for Finance, Accounting, Tax, Treasury, Investor Relations, and Business Development, he oversees Cleveland-Cliffs Inc.’s financial division. Mr. Goncalves served as Senior Vice President of Finance & Treasurer prior to taking on his current position. In that capacity, he was responsible for managing the company’s cash, liquidity, and capital structure as well as business development initiatives by analyzing and carrying out M&A deals and capital investments. Mr. Goncalves worked in New York’s Industrials Investment Banking department at Deutsche Bank before joining Cleveland-Cliffs, carrying out capital markets and strategic advising transactions for multinational corporate and private equity customers. Prior to joining Deutsche Bank, he worked for Jefferies in New York’s Leveraged Finance business, where he structured and carried out High Yield and Leveraged Loan deals.
Opinion: I like the big picture. Buy American is going to be around for many years. Unless we go into a steep recession, this should work out fine. CLF has pulled back a lot and Goncalvez seems like an opportune buyer.
Name: Simon Karen Jo
Position: Director
Transaction Date: 2022-08-12 Shares Bought: 35,000 Average Price Paid: $16.20 Cost: $567,000.00
Company: Crescent Energy Co. (CRGY)
Name: Kendall Brandi
Position: CFO
Transaction Date: 2022-08-12 Shares Bought: 5,500 Average Price Paid: $15.88 Cost: $87,325.00
Company: Crescent Energy Co. (CRGY)
Name: Rockecharlie David C.
Position: CEO
Transaction Date: 2022-08-12 Shares Bought: 31,250 Average Price Paid: $15.78 Cost: $493,276.00
Company: Crescent Energy Co. (CRGY)
Name: Conner Benjamin
Position: Executive Vice President
Transaction Date: 2022-08-12 Shares Bought: 6,416 Average Price Paid: $15.56 Cost: $99,807.00
Company: Crescent Energy Co. (CRGY)
Crescent Energy Business is an energy company that searches for, develops, and produces deposits of crude oil, natural gas, and natural gas liquids (NGLs). The business owns oil and natural gas properties in important proven basins throughout the United States, including the Eagle Ford, Rockies, Barnett, Permian, Mid-Con, and others. It has 1,528 gross undrilled sites as of December 31, 2021, including 567 gross operational drilling locations, and 531.6 net million barrels of oil equivalent of proven reserves. The corporation was established in 2020 and is headquartered in Houston, Texas.
Karen Simon has been a member of our Board of Directors since December 2021. Ms. Simon formerly served as a director of Contango from April 2021. Ms. Simon formerly worked at JPMorgan as Vice Chairman, Investment Banking, until retiring in December 2019. She held a number of leadership positions during her 36-year banking career, including Global Co-Head of Financial Sponsor Coverage, which provided M&A and capital raising investment banking services to private equity funds; Co-Head of EMEA Debt Capital Markets and Head of EMEA Oil & Gas coverage, both in London; and, most recently, she founded JPMorgan’s Director Advisory new client group focused on providing advice to public company Directors.Ms. Simon now serves on the boards of two European public businesses, one of which she chairs, Energean plc (LON: ENOG) in London (LON: ENOG) since March 2018 and Aker ASA (OSL: AKER) in Oslo (OSL: AKER)
Brandi Kendall (Houston) joined KKR in 2013 and is responsible for the Energy Real Assets team’s portfolio management activities, including finance, planning, risk management, and corporate development. Ms. Kendall is Crescent Energy’s Chief Financial Officer and a member of its Board of Directors. Ms. Kendall previously worked as the director of finance and planning at Marlin Midstream and as a finance associate at NFR Energy. Ms. Kendall began her career in energy investment banking, working at JP Morgan and Tudor, Pickering, Holt & Co. Ms. Kendall graduated from Rice University with a BA in Economics, Management Studies, and Kinesiology.
David C. Rockecharlie formed RPM Energy LLC. Mr. Rockecharlie is the Chief Executive Officer and Director of Crescent Energy Co., as well as the Vice President of Newark C-I Holding LP (a Crescent Energy Co. subsidiary) and the Partner and Head of Energy Real Assets at Kohlberg Kravis Roberts & Co. LP. David C. Rockecharlie is also the Vice President of Independence Minerals LP, EIGF TE Resource Holding I LP, and KNR Resource Holdings I LP. Vice President of EIGF TE GP Resource Holdings I LP, Vice President of KNR Resource Investors LP, Vice President of EIGF TE GP Newark Acquisition I LP, Vice President of EIGF TE GP Resource Investors LP, Vice President of EIGF TE GP Resource Investors LP, Vice President at EIGF Minerals LP, Vice President of Vine Royalty LP, Vice President of Mineral Acquisition Co. I LP, Vice Presidente formerly served as Chief Executive Officer of Independence Energy LLC, Senior Vice President of El Paso Interim Corp., and Principal of Jefferies LLC. Mr. Rockecharlie graduated from Princeton University with a bachelor’s degree.
Since December 2021, Ben Conner has served as Executive Vice President. Mr. Conner formerly worked as the managing member of Independence’s Executive Vice President since March 2021. Mr. Conner joined KKR in 2014 and works in the Energy Real Assets group. He was involved in various upstream oil and gas ventures in North America while at KKR as part of the Energy Income and Growth Fund. Prior to joining KKR, Mr. Conner worked at Lime Rock Partners, where he was actively involved in a variety of investments, with a special emphasis on North American upstream oil and gas, as well as oilfield equipment, manufacturing, and services. Prior to joining Lime Rock, he was a member of J.P. Morgan’s natural resources investment banking practice, where he worked on various corporate advising and financing deals.
Opinion: Wouldn’t you know it that an oil and gas company no one has ever heard of returned 11% for watchful investors last week. I personally like natural gas investment prospects better than oil, but clearly, money can be made at these crude prices.
Name: Toloue Masoud
Position: CFO
Transaction Date: 2022-08-12 Shares Bought: 105,000 Average Price Paid: $10.43 Cost: $1,095,150.00
Company: Quanterix Corp. (QTRX)
Quanterix Corporation is a life sciences firm that develops and markets digital immunoassay systems for life sciences research and diagnostics in North America, Europe, the Middle East, Africa, and the Asia Pacific area. It provides the HD-X instrument, which is a sensitive automated multiplex protein detection platform, as well as the SR-X instrument, which allows researchers to use Simoa detection technology in a variety of applications, including direct detection of nucleic acids. The firm also offers the SP-X instrument, which is based on Simoa planar array technology and is used to test multiplex chemiluminescent immunoassays. The company’s main areas of focus include neurology, cancer, cardiology, infectious illnesses, and inflammation. Through a direct sales force, support organizations, and distributors or sales agents, it sells its products for the life science research sector primarily to laboratories associated with academic and governmental research institutions, as well as pharmaceutical, biotechnology, and contract research companies.
Twenty years of expertise scaling privately held and publicly traded businesses, commercializing revolutionary technologies, and promoting operational excellence in the biotechnology industry. Masoud Toloue, CEO of Quanterix, has 44 employee ratings and a score of 93/100, ranking Quanterix in the Top 5% of other Boston firms and similar-sized companies on Comparably with 201-500 Employees. Masoud Toloue receives a higher rating from Quanterix’s female employees than from its male employees when the CEO score is broken down by categories including department, gender, and ethnicity, giving the CEO a 95/100 rating. Quanterix Corporation’s CEO.
Opinion: This was the biggest money loser last week, down 11.5%. QTRX was a big winner in the previous weeks, so this could be just some profit taking from the fast-money crowd.
Name: Mcdonald John T
Position: CEO
Transaction Date: 2022-08-11 Shares Bought: 20,000 Average Price Paid: $11.31 Cost: $226,200.00
Company: Upland Software Inc. (UPLD)
Upland Software, Inc. is a cloud-based enterprise work management software provider with offices in the United States, the United Kingdom, Canada, and other countries. Under the Upland brand, it provides a suite of software products in marketing, sales, contact center, project management, information technology, business operations, human resources, and legal. In addition, the firm offers professional services such as implementation, data extraction, integration and setup, and training, as well as client support. Through direct and indirect sales organizations, it serves large global corporations, various government agencies, and small and medium-sized businesses, as well as the financial, consulting, technology, manufacturing, media, telecommunications, political, healthcare, life sciences, retail, and hospitality, and non-profit industries. In November 2013, the firm changed its name from Silverback Enterprise Group, Inc. to Upland Software, Inc. Upland Software, Inc. was founded in 2010 and is based in Austin, Texas.
Since its inception in July 2010, John T. McDonald has served as our Chief Executive Officer and Chairman of the Board. Prior to creating Upland in 2010, Mr. McDonald was Chief Executive Officer and Chairman of Perficient, Inc. (Nasdaq: PRFT), an information technology consulting business, from 1999 to 2009. From 1987 until 1993, Mr. McDonald worked as an attorney at Skadden, Arps, Slate, Meagher & Flom LLP in New York, focused on mergers and acquisitions and corporate finance. Mr. McDonald served as chairman of the Greater Austin Chamber of Commerce and on the boards of many privately owned firms and non-profit organizations. Mr. McDonald graduated from Fordham University with a B.A. in Economics and a J.D. from Fordham Law School.
Opinion: The CEO is beginning to show conviction. Generally, poor financials is not a substitute for insider buying.
Name: Young Donald Win
Position: Director
Transaction Date: 2022-08-16 Shares Bought: 89,603 Average Price Paid: $2.67 Cost: $239,454.00
Company: Newpark Resources Inc. (NR)
Name: Minge John C
Position: Director
Transaction Date: 2022-08-15 Shares Bought: 15,000 Average Price Paid: $2.66 Cost: $39,851.00
Company: Newpark Resources Inc. (NR)
Mr. Goncalves worked in New York’s Industrials Investment Banking department at Deutsche Bank before joining Cleveland-Cliffs, carrying out capital markets and strategic advising transactions for multinational corporate and private equity customers. Prior to joining Deutsche Bank, he worked for Jefferies in New York’s Leveraged Finance business, where he structured and carried out High Yield and Leveraged Loan deals. Additionally, Mr. Goncalves was a founding member of Jefferies’ Latin America Investment Banking business, which has offices in New York and So Paulo, Brazil. The Industrial Solutions segment provides customers in a variety of markets, including power transmission, E&P, pipeline, renewable energy, petrochemical, construction, and other industries, rentals of composite matting systems used for temporary worksite access, related site construction, and services, primarily in the United States and Europe, as well as sales of composite mats to customers worldwide.
Donald Win Young formed Race Rock Group LLC. He now holds the positions of Chairman of Hoover Ferguson Group, Inc., CEO of Hoover Materials Handling Group, Inc., a division of Hoover Ferguson Group, Inc., and Chairman of Structural & Steel Products, Inc. In addition, he serves on the boards of nine additional businesses and is a member of Young Presidents’ Organization, Inc. He has held positions as Principal at Prudential Securities, Vice President of Citicorp Venture Capital Ltd., Principal at Sciens Capital Management LLC, Principal at Bank of America Securities, Inc., and Principal at Bank of America Securities, Inc. Harvard University awarded him a degree in undergraduate studies.
Beginning on December 1, 2017, Mr. John C. Minge assumed the position of Independent Director for the Company. In December 2017, he became a member of our board of directors. Mr. Ming is the chairman of a National Petroleum Council research on carbon capture, use, and storage technologies. He presently works at BP America, Inc. Prior to this, he held the positions of Chairman and President of BP America, Inc. from February 2013 until May 2018. Mr. Ming led BP Alaska Exploration and Production as president from January 2009 until February 2013. With more than 34 years of experience in the oil and gas sector, Mr. Ming started his career with Standard Oil of Ohio in Cleveland, Ohio as a drilling research engineer.
Opinion:
Name: Espeland Curtis E
Position: Director
Transaction Date: 2022-08-11 Shares Bought: 15,000 Average Price Paid: $30.18 Cost: $452,645.00
Company: Huntsman CORP. (HUN)
Name: Stryker David M
Position: VP
Transaction Date: 2022-08-11 Shares Bought: 10,000 Average Price Paid: $29.90 Cost: $298,995.00
Company: Huntsman CORP. (HUN)
Huntsman Corporation is a global manufacturer and distributor of unique, organic chemical products. Polyurethanes, Performance Products, Advanced Materials, and Textile Effects are the company’s four business segments. Polyurethane compounds, such as methyl diphenyl diisocyanate, polyols, thermoplastic polyurethane, propylene oxide, and methyl tertiary-butyl ether, are available in the Polyurethanes section. Among the amines and maleic anhydrides produced by the Performance Products segment are ethylene oxide, propylene oxide, glycols, ethylene dichloride, caustic soda, ammonia, hydrogen, methylamines, and acrylonitrile. Epoxy, acrylic, polyurethane, and acrylonitrile-butadiene-based polymer formulations; high-performance thermoset resins, curing agents and toughening agents, and carbon nanotubes additives; and basic liquid and solid resins are all available in the Advanced Materials sector. Textile chemicals and dyes are available in the Textile Effects category. Adhesives, aerospace, automotive, building goods, durable and non-durable consumer items, electronics, insulation, medical, and packaging.
Mr. Espeland was the former Executive Vice President and Chief Financial Officer of Eastman Chemical Company, a developer of advanced materials and specialty additives, from 2014 until his retirement in 2020. Mr. Espeland joined Eastman Chemical Company in 1996. He held the positions of Vice President, Finance, and Chief Accounting Officer from 2005 to 2008 and Senior Vice President and Chief Financial Officer from 2008 to 2014. He is a member of the Board of Directors and the Lead Independent Director of Lincoln Electric Holdings, Inc., where he also serves on the finance and audit committees. He is a director of Nouryon, a worldwide specialty chemicals company where he chairs the audit committee.
Executive Vice President, General Counsel, and Secretary David Stryker Mr. Stryker was appointed to this role in June 2013, shortly after joining Huntsman. Mr. Stryker formerly worked for the BASF Corporation as Senior Vice President, General Counsel, Secretary, and Chief Compliance Officer. He served on the North America Executive Committee for nine years as the senior legal, compliance, and government affairs officer. He was previously Associate General Counsel and Chief Compliance Officer at Siemens Corporation and a partner at Kirkland & Ellis. Mr. Stryker began his legal career as a judicial clerk to the Honorable Robert H. Bork of the District of Columbia Circuit Court of Appeals.
Opinion: This is the pot of gold at the end of the rainbow. The company that invented the clamshell polystyrene packaging for McDonald’s quarter pounder may have done it again. I believe if you quiet your mind, there is gold that can be plucked out of the market nearly every day. Open your eyes and see. “Why would directors buy a boring old chemical company?” I thought. Sure the Huntsmans are undoubtedly a brilliant family, a bedrock of Utah’s philanthropy. The stock trades at a cheap multiple, but there might be something else. After all, a lithium battery is just a chemical reaction. My six quarters of college chemistry may have just found some practical usage. I googled Huntsman Chemical and EV batteries. Lo and behold, it was right there on their press release. Huntsman plans increases the production of EV battery.
It gets even better. As I understand it, the Inflation Protection Act, with its $7500 credit for EV vehicles, mandates that most of it be made in the U.S or friendly countries or something to that effect starting in 2023. It just so happens, according to the Company, that they have the only plant in the U.S. that produces cyclic carbonates, an essential ingredient of ALL lithium batteries used in EVs. I’m thinking it might be bigger than the Big Mac.
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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, or none at all in any of these names, and are under no obligation to disclose that. We welcome your comments on our analysis. You should not confuse this newsletter with the hedge fund I manage.
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
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