This is LIKE 2008, contrary to what you may have heard about the recent Silicon Valley Bank failure. Banks either don’t want to pay competitive deposit rates or can’t. Competing with Fed Chairman Powel’s ~5% treasuries is hard. Actually no banks can compete with it. Vast sums are being withdrawn from the banking system.
Ironically the stock market is on the only place you will be able to compete with the yield crisis that the Fed is precipitating. Many solid companies are paying good dividends with the likely prospect of raising them. So tell me, how is this not like 2008? Well, one way is that insiders are not buying the market.
As you may recall, the Fall of 2008 and the Spring of 2009 was the best market buying opportunity in our lifetimes. That was the year I transitioned from managing just my capital into launching the Insiders Fund. It was the year that gave me the confidence that my strategy of paying close attention to what insiders were doing with their own money was not only the safest way to invest, but was one of the best. Had I been a hedge fund in 2009, which I was not yet fully authorized to accept outside monies, my cumulative performance results since 2001 would have ranked me as one of the very best performing hedge funds in the country. Enough of the chest pumping; this is not what this is about.
Take a close look at this chart supplied by my friend Frank at SecForm4.com of the ratio of insider buying versus selling. Every major sell off in the stock market for over 20 years has ended with an explosion of insider buying.
The blue line represents insider buying/selling. Insiders are natural sellers because a lot of their compensation is in stock. You can see that in every significant decline, it ended when insiders bought stock in droves. Where are we now? Almost record levels of selling, not buying. This is a blunt reminder that we are not anywhere close to a seminal buying opportunity.
We will add our comments to the many buys this week and update the post as often as practical on this most interesting of weekends. I welcome your comments.
Name: Warren E Buffett / Berkshire Hathaway Inc
Position: 10% Owner
Transaction Date: 2023-03-03 Shares Bought: 5,801,791 Average Price Paid: $61.10 Cost: $354,513,472
Company: Occidental Petroleum Corp /DE/ (OXY)
The primary operations of Occidental are divided into three reporting segments: oil and gas, chemical and midstream, and marketing. The oil and gas section searches for, develops, and produces oil, natural gas, and natural gas liquids. The chemical industry largely produces and sells basic chemicals and vinyl. The midstream and marketing section buys, sells, collects, processes, transports, and stores oil, natural gas, CO2, and electricity. It also improves its transportation and storage capacity and invests in companies that do similar things, such as WES. Human Resources manages Occidental’s human capital resources and initiatives, with assistance from business executives. The Board’s Sustainability and Shareholder Engagement Committee, as well as the Board’s Environmental, Health, and Safety Committee.
Warren Edward Buffett is an American businessman and philanthropist born in Omaha, Nebraska, on August 30, 1930. He is recognized as the twentieth and early twenty-first century’s most successful investor. Buffett, often known as the “Oracle of Omaha,” was the son of Howard Homan Buffett, a Nebraska congressman. After receiving a B.S. from the University of Nebraska in 1950, he studied under Benjamin Graham at the Columbia University School of Management. (M.S., 1951). Buffett relocated to Omaha in 1956 and, in 1965, purchased a controlling share in textile manufacturer Berkshire Hathaway Inc., which he utilized as his principal investment vehicle.
Opinion: Buffett is a notoriously patient investor. People talk about crypto as a hedge against fiat currency. Oil and gas are like a form of currency buried safely and securely in the ground. It’s lunacy to think that the source of energy and basic input is going to be replaced anytime soon.
Name: Carl C Icahn
Position: 10% Owner
Transaction Date: 2023-03-10 Shares Bought: 2,332,835 Average Price Paid: $60.12 Cost: $140,250,040
Company: Southwest Gas Holdings Inc. (SWX)
Southwest Gas Holdings, Inc. is a Delaware corporation based in Las Vegas, Nevada. Arizona, Nevada, and California customers are served by Southwest and its subsidiaries, which offer regulated natural gas distribution services. It has had 2,197,000 residential, commercial, industrial, and other natural gas customers since December 31, 2022. The corporation was founded in 1931 and is based in Las Vegas, Nevada. Southwest Gas Holdings, Inc. distributes and transports natural gas in Arizona, Nevada, and California through its subsidiaries. Its business segments include Natural Gas Distribution, Utilities Infrastructure Services, and Pipeline and Storage. In addition, the firm offers trenching, installation, and repair of underground pipelines, as well as energy distribution system maintenance.
Carl C. Icahn is the Chairman of the Board of Directors of Icahn Enterprises L.P., a diversified holding firm interested in investing in automotive, energy, food packaging, metals, real estate, and home fashion. Mr. Icahn’s primary activity since 2007 has been managing private investment funds, including Icahn Partners L.P. and Icahn Partners Master Fund LP, via his role as Chief Executive Officer of Icahn Capital L.P., a fully owned subsidiary of Icahn Enterprises L.P., and several affiliated organizations. Mr. Icahn has served as Chairman of the Board of Directors of Starfire Holding Corporation, a privately owned holding company, since 1990 and as Chairman of several Starfire subsidiaries since 1984. Icahn graduated from Princeton University with a B.A.
Opinion: Another smart investor, like Buffett, betting on the permanency of fossil fuels. Southwest Gas has a current dividend yield of 4.18% with a 30+ year history of raising its dividends. Fed rates hikes are either over or slowing dramatically due to the Friday collapse of Silicon Valley Bank. I think its a good time to buy.
Name: Tamara Hughes Gustavson
Position: Director
Transaction Date: 2022-09-27 Shares Bought: 422,203 Average Price Paid: $36.55 Cost: $15,430,415
Company: American Homes 4 Rent (AMH)
American Homes 4 Rent is a market leader in the single-family home rental sector, and “American Homes 4 Rent” is quickly becoming a nationally recognized brand for rental houses, renowned for high-quality, excellent value, and tenant happiness. The company is an internally managed Maryland real estate investment trust (REIT) focused on purchasing, developing, remodeling, leasing, and running beautiful single-family houses as rental properties. The company believes that they have become a leader in the single-family home rental industry by assembling a geographically diverse portfolio of high-quality single-family homes and developing into a nationally recognized brand that is well-known for quality, value, and resident satisfaction and is well respected in the communities. The company’s mission is to simplify leasing a home and provide peace of mind to families nationwide.
Ms. Gustavson has been a corporate trustee since August 2016. Ms. Gustavson was formerly Chairperson from May 2019 to May 2020 and a member of the Human Capital and Remuneration Committee from May 2021 to May 2022. She is also a philanthropist and real estate investor and has served on the Public Storage Board since November 2008. She worked with Public Storage from 1983 to 2003, most recently as Senior Vice President Of Administration. Ms. Gustavson has controlled her business interests and participated in philanthropic activities for the last six years. Ms. Gustavson is also a member of the William Lawrence and Blanche Hughes Foundation Board of Trustees and the University of Southern California Board of Trustees.
Opinion: I don’t know about this name. More and more people are shut out from owning a home due to the rapid rise in mortgage rates. Full employment is good for AMH home rentals. Home prices have appreciated way out of historic norms and AMH may be a victim of its own success. I think we will pass.
Name: James K Price
Position: Director
Transaction Date: 2023-03-03 Shares Bought: 27,636 Average Price Paid: $36.18 Cost: $999,982
Company: Montrose Environmental Group Inc. (MEG)
Name: J Thomas Presby
Position: Director
Transaction Date: 2023-03-03 Shares Bought: 5,000 Average Price Paid: $36.16 Cost: $180,775
Company: Montrose Environmental Group Inc. (MEG)
Montrose Environmental Group, Inc. provides environmental services in the United States and worldwide. The business is divided into three divisions: assessment, permitting, and response; measurement and analysis; and remediation and reuse. Environmental assessments, environmental emergency response and recovery, toxicology consulting, environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects, and development projects are provided by the Assessment, Permitting, and Response segment. The Measurement and Analysis section examines and analyses air, water, and soil to identify pollutant concentrations and the toxicological effect of contaminants on flora, fauna, and human health. The Remediation and Reuse section mainly offers engineering, design, implementation, and operations and maintenance services to clean polluted water, remove toxins from soil, and generate biogas from waste.
Mr. Price has been a member of the Board of Directors since December 2013. Mr. Price has been a co-founder and the Chief Executive Officer of ExamWorks Group, Inc., a supplier of independent medical examination services, since October 2010. Mr. Price previously served as ExamWorks’ Co-Chairman of the Board and Co-Chief Executive Officer beginning in 2008. Mr. Price formerly held the positions of President, Chief Executive Officer, and Director of TurboChef Technologies, Inc., as well as President, Chief Executive Officer, and Director of PracticeWorks, Inc. Mr. Price was an AMICAS, Inc. co-founder and served as its Executive Vice President and Secretary. Mr. Price co-founded and served as an executive officer of American Medcare and International Computer Solutions. Mr. Price graduated from the University of Georgia with a Bachelor of Arts in marketing.
Mr. Presby has been a member of the Board of Directors since August 2016. Mr. Presby is a former partner of Deloitte & Touche. He held several leadership roles in the United States and internationally throughout his 30 years as a partner, including ten years in Paris and Central Europe, expanding Deloitte’s worldwide network. He was Global Deputy Chairman and Chief Operational Officer for seven years until leaving in 2002. Mr. Presby has previously served as a trustee of Rutgers University and Montclair State University and as director and chairman of The German Marshall Fund of the United States. Mr. Presby graduated from Rutgers University with a Bachelor of Science in electrical engineering and from Carnegie Mellon University with a Master of Science in industrial management.
Opinion: No revenue growth over the last two years is concerning when ESG investment has been at record levels. There are less complicated stories out there.
Name: Roger Frederick Johnson
Position: Chief Supply Chain Officer
Transaction Date: 2023-03-03 Shares Bought: 23,000 Average Price Paid: $34.55 Cost: $794,650
Company: Keurig Dr Pepper Inc. (KDP)
Name: Sudhanshu Shekhar Priyadarshi
Position: Chief Financial Officer
Transaction Date: 2023-03-02 Shares Bought: 50,000 Average Price Paid: $34.39 Cost: $1,719,320
Company: Keurig Dr Pepper Inc. (KDP)
Keurig Dr. Pepper Inc. is a significant North American beverage business with a diversified portfolio of flavored CSDs and NCBs, including water, RTD tea and coffee, juice, juice drinks, mixers, and specialty coffee, a leading manufacturer of innovative single-serve brewing equipment. KDP’s main brands include Keurig, Dr. Pepper, Canada Dry, Snapple, Mott’s, Clamato, Core, Green Mountain Coffee Roasters, and The Original Donut Shop, which provide a wide variety of hot and cold drinks to fulfill practically every customer requirement. KDP boasted some of North America’s most well-known beverage brands, with high levels of consumer awareness and extended histories that elicit strong emotional ties. According to IRi, KDP provides more than 125 owned, licensed, and partner brands, including the top 10 best-selling coffee brands and Dr. Pepper as a leading flavored CSD in the United States. These are accessible practically anywhere consumers purchase and enjoy beverages.
Roger Johnson was appointed Keurig Dr. Pepper’s Chief Supply Chain Officer in October 2022. 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. Johnson joined KDP in 2016 and has held many senior roles in the supply chain and R&D groups, including Chief Product Officer for the Keurig brand and Senior Vice President, Global Product Organization and GM Asia. In those responsibilities, he developed KDP’s global operations center in Singapore, expanded the organization’s brewer production network throughout Asia, and devised extremely effective brewer innovation initiatives. He has a bachelor’s and master’s degree in engineering from Purdue University and an MBA from the University of Michigan.
Sudhanshu Priyadarshi served as Chief Financial Officer at Keurig Dr. Pepper’s, overseeing the Finance and Information Technology departments. Sudhanshu will join KDP from Vista Outdoor Inc., a renowned worldwide designer, producer, and marketer of consumer goods in the outdoor sports and leisure industries, in November 2022. He served as Vista Outdoor’s Chief Financial Officer during strong organic and inorganic expansion. Sudhanshu began his career with PepsiCo, where he spent 14 years in financial and corporate strategy positions, including Chief Financial Officer of Global R&D and PepsiCo Global Nutrition Platforms. Sudhanshu is a Wabash Board of Directors member and a world-class provider of innovative engineering solutions and services for the transportation, logistics, and distribution sectors. He has a physics degree from India and an MBA in Finance from the University of Technology, Sydney.
Opinion: Keurig Dr. Pepper must have a demanding stock ownership requirements for officers and directors. That’s the only thing that I can find to explain the continuous purchases in this mediocre earner. Constant revenue growth that doesn’t translate to GAAP earnings is troublesome.
Name: Erik D. Ragatz
Position: Director
Transaction Date: 2023-03-06 Shares Bought: 111,375 Average Price Paid: $27.27 Cost: $3,037,612
Company: Grocery Outlet Holding Corp. (GO)
Grocery Outlet is a high-growth, extreme-value retailer of quality, name-brand consumables, and fresh items distributed via an independent shop network. The corporation has 441 shops as of December 31, 2022, across California, Washington, Oregon, Pennsylvania, Idaho, Nevada, Maryland, and New Jersey. The corporate headquarters are in Emeryville, California. Each establishment provides a fascinating treasure hunt shopping experience in a small-box style that is simple to browse. The flexible purchasing methodology provides high-quality, name-brand opportunistic items at 40% to 70% lower prices than traditional merchants. The businesses are managed by entrepreneurial independent operators who create a neighborhood atmosphere via individualized customer service and a specific product range.
Mr. Ragatz has been a Partner with Hellman & Friedman LLC, a private equity company, since January 2008. Mr. Ragatz oversees Hellman & Friedman’s consumer, retail, and industrial investments. He is now the Chairman and a member of the board of directors of Snap One Holdings Corp. He also serves as Wand TopCo Inc.’s lead outside director and member of the audit and pay committees. Mr. Ragatz served as Chairman of the Board from October 2014 to December 2022 and is presently the Lead Independent Director. Mr. Ragatz has extensive strategic, financial, and business development skills and insight into the correct functioning and responsibility of corporate boards of directors obtained via his years of service on the boards of directors of H&F’s portfolio businesses.
Opinion: Is this the dollar store version of groceries? Not sure about this name as the insider buying selling picture is very confusing. Although this is a large purchase there are numerous senior managers selling stock at the same time.
Name: Richard Barry
Position: Director
Transaction Date: 2023-03-06 Shares Bought: 88,841 Average Price Paid: $25.81 Cost: $2,292,823
Company: Cassava Sciences Inc. (SAVA)
Cassava Sciences, Inc. is an Austin, Texas-based clinical-stage biotechnology business. The firm aims to diagnose and cure neurodegenerative disorders such as Alzheimer’s. In Phase 3 clinical trials, the principal therapeutic medication candidate, simufilam, is being examined to treat Alzheimer’s disease dementia potentially. During the last decade, the business has merged cutting-edge technology with new neurobiological insights to create potential treatments for Alzheimer’s and other neurodegenerative disorders. The company aims to use its unique scientific/clinical platform to create a first-of-its-kind program for treating neurodegenerative disorders like Alzheimer’s. The scientific approach to Alzheimer’s disease therapy aims to reduce both neurodegeneration and neuroinflammation at the same time.
Mr. Barry has a wealth of expertise in the financial management industry. From 1999 until 2010, he was a Managing General Partner and Portfolio Manager at Eastbourne Capital Management LLC, a significant equity hedge fund investing in health care and various other sectors. Mr. Barry formerly worked at Robertson Stephens Investment Management as a Portfolio Manager and Managing Director. Mr. Barry worked with institutional stock and investment management businesses such as Lazard Freres, Legg Mason, and Merrill Lynch for over 13 years in different positions. Mr. Barry graduated from Pennsylvania State University with a Bachelor of Arts degree. He formerly served on the Advisory Board of Pennsylvania State University’s Schreyer Honors College and as a director of Cluster Wireless, a San Diego-based software firm.
Opinion: Cassava is a widely talked about stock and a true battleground for the Alzheimer’s debate. We were very fortunate to ride this stock from $8 to $100 in a few short months at the end of 2020-beginning of 2021. Insiders are back buying and in spite of all the bears saying this drug is no better than common vitamins at thwarting the dreaded disease of Alzheimer’s, the prize for even moderate success is huge. Simufilam represents a different approach than the amyloid plaque approach that has garnered so much interest with such poor results.
Name: D Mark DeWalch
Position: Director
Transaction Date: 2023-03-06 Shares Bought: 34,250 Average Price Paid: $15.85 Cost: $542,843
Company: Black Stone Minerals L.P. (BSM)
Black Stone Minerals L.P. is one of the United States’ biggest owners and managers of oil and natural gas mineral holdings. The company’s main activity is to actively manage and increase the value of current mineral and royalty assets while broadening the asset base through the purchase of new mineral and royalty holdings. The company adds value by letting people know about mineral properties that are available for lease, coming up with creative ways to structure lease agreements to encourage and speed up drilling, and carefully choosing which lessees to work with on a working interest basis. The company thinks that its wide range of assets and long-lasting, non-cost-bearing mineral and royalty interests will lead to consistent production and reserves over time. This will allow it to give unitholders the vast majority of its cash flow.
Mr. DeWalch has been the General Partner’s director since March 2015. From 2009 until 2015, Mr. DeWalch was the director of BSNR. Mr. DeWalch has been the Executive Vice President and Chief Financial Officer of DeWalch Technologies, Inc. since 1993 and a company co-owner since 1995. Mr. DeWalch has been a member of the DeWalch Technologies, Inc. board of directors since 1985. Mr. DeWalch is also the President of DeWalch Holdings LLC and a co-owner of the company. Mr. DeWalch is the Executive Vice President of DeWalch FM LLC and a co-owner. Mr. DeWalch started his commercial banking career as a loan officer in New York with the Irving Trust Company. Mr. DeWalch earned an M.B.A. and a B.B.A. from the University of Texas at Austin.
Opinion: This is a high yield, ~13% royalty trust diversified in all the major oil and gas producing basins in the U.S. If you believe in the long term future of fossil fuels, this represents a buying opportunity. The dividend will vary with the prices of the underlying commodities.
Name: Michael S Gross
Position: Chief Executive Officer
Transaction Date: 2023-03-03 Shares Bought: 152,158 Average Price Paid: $15.64 Cost: $2,379,853
Company: SLR Investment Corp. (SLRC)
Name: Bruce J Spohler
Position: Chief Operating Officer
Transaction Date: 2023-03-03 Shares Bought: 152,158 Average Price Paid: $15.64 Cost: $2,379,853
Company: SLR Investment Corp. (SLRC)
SLR Investment Corp., incorporated in Maryland in November 2007, is a closed-end, externally managed, non-diversified management investment firm that has chosen to be governed as a business development company. The business typically invests in privately owned middle-market companies in the United States, where it believes the availability of primary capital is limited and the investment prospects are most appealing. With debt and equity investments, the goal is to create current income and capital appreciation. The business typically invests in leveraged middle-market companies via senior secured loans, financing leases, and, to a lesser degree, unsecured loans, and equity instruments. Moreover, the corporation may spend a part of its portfolio on other sorts of investments, known as opportunistic investments, which are not the major emphasis but are meant to boost total results.
Michael Gross has been the company’s Chief Executive Officer and President since 2007 and its Co-Chief Executive Officer since 2019. He has over 30 years of expertise in the private equity, distressed debt, and mezzanine lending industries. Mr. Gross was President, Chief Executive Officer, and Chairman of Apollo Investment Corporation, a publicly listed business development firm he created, from 2004 until 2006. Mr. Gross is also a founding member and former senior partner of Apollo Management, L.P., a major private equity company. Mr. Gross oversaw Apollo Management, L.P.’s debt-related operations. He was the managing partner of Apollo Distressed Investment Fund, L.P., which he founded in 2003 to invest primarily in leveraged loans and other securities. Mr. Gross has a B.B.A. in Accounting from the University of Michigan and an M.M. from Northwestern University’s J.L. Kellogg Graduate School of Management.
Bruce Spohler, the company’s Chief Operating Officer since 2007, was named Co-Chief Executive Officer in June 2019 and has more than 30 years of experience in leveraged finance. Mr. Spohler previously worked at CIBC World Markets as a Managing Director and Co-Head of US Leveraged Finance. He held a number of top positions at CIBC World Markets, including membership on the U.S. Management Committee, the Global Executive Committee, and the Transactions Committee, which authorised all of CIBC World Markets’ non-investment grade debt capital choices in the United States. Mr. Spohler was in charge of senior loan, high yield, and mezzanine origination and execution, as well as CIBC Global Markets’ below investment grade loan portfolio in the United States. Mr. Spohler received a B.S. from Syracuse University and an M.M. from Northwestern University’s J.L. Kellogg Graduate School of Management.
Opinion: Business development companies act as a a shadow bank offering mezzanine loans to thousands of companies outside the regulatory framework of the banking system. It’s basically a high yield fund with significant return of principal risk.
Name: Barry M Smith
Position: Director
Transaction Date: 2023-03-03 Shares Bought: 30,000 Average Price Paid: $14.99 Cost: $449,712
Company: Pennant Group Inc. (PNTG)
The Pennant Group, Inc. is a prominent provider of high-quality healthcare services to patients and residents of all ages in the United States, particularly the expanding senior population. The organization strives to be the supplier of choice in the areas it serves by utilizing an innovative operating strategy. On October 1, 2019, the firm completed a spin-off from its previous parent company, The Ensign Group, Inc., which transferred to the company all of its home health and hospice agencies, as well as nearly all of its senior residential companies. As of December 31, 2021, the firm operated numerous lines of business in Arizona, California, Colorado, Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming, including home health, hospice, and senior living.
Barry M. Smith held the positions of Chairman and Chief Executive Officer at Magellan Health, Inc., the largest behavioral health services provider in the country and a top national provider of radiology benefit management services, specialty pharmacy services, and prescription benefit management services from 2013 to 2019. He created and held the positions of Chairman, President, and Chief Executive Officer of VistaCare, Inc. from 1996 to 2002, and he also held the position of Chairman of VistaCare in 2003. The company has concluded that Mr. Smith should be one of the directors because of his vast experience as a proven and experienced leader in numerous healthcare businesses closely related to their businesses and his insightful strategic and other management abilities.
Opinion: Fairly neutral on this name. Don’t understand the mediocre financial performance with 10,000 seniors per day turning over age 65.
Name: James Defranco
Position: Director
Transaction Date: 2023-03-02 Shares Bought: 800,000 Average Price Paid: $11.05 Cost: $8,843,000
Transaction Date: 2023-03-06 Shares Bought: 1,450,000 Average Price Paid: $10.84 Cost: $15,718,000
Company: Dish Network Corp. (DISH)
DISH Network Corporation was formed in 1995 as a Nevada business under Nevada law. In March 1996, the firm launched the DISH® branded pay-TV service, followed by the SLING® branded pay-TV service in January 2015, and retail wireless services in July 2020. DISH Network Corporation is a conglomerate. The Pay-TV business plan aims to be the top video service provider in the United States by offering goods with cutting-edge technology, exceptional customer service, and amazing value. The firm promotes Pay-TV services by offering consumers a better “price-to-value” connection and experience than other subscription television service providers.
Jim DeFranco is one of DISH’s Executive Vice Presidents and has been a vice president and member of the Board of Directors since the company’s inception. During the last five years, he has held numerous executive officer and director roles with DISH’s subsidiaries. In 1980, Jim co-founded DISH Network with Charlie Ergen and Cantey Ergen.
Opinion: There is this narrative in the investment community that Dish’s wireless spectrum will be the foundation for a major cellular competitor. If that’s going to happen, I think they better hurry up and make it happen. The stock is sinking like a rock.
Name: Chad C Deaton
Position: Director
Transaction Date: 2023-03-02 Shares Bought: 30,000 Average Price Paid: $7.40 Cost: $222,000
Company: Transocean Ltd. (RIG)
Transocean Ltd. is a top international provider of offshore contract drilling for oil and gas wells. A fleet of 37 mobile offshore drilling units, including 27 ultra-deepwater floaters and ten harsh environment floaters, was owned, operated, or had a portion of their own as of February 14, 2022, by the company. The company had two ultra-deepwater drillships under construction as of February 14, 2022. The company’s main line of business is contract drilling, which involves hiring mobile offshore drilling rigs, ancillary equipment, and work crews to drill oil and gas wells. The company specializes in technically challenging areas of the global offshore drilling industry with a focus on ultra-deepwater and harsh environment drilling services. The drilling fleet, which consists of drillships and semisubmersible floaters used to support offshore drilling activities and offshore support services globally, is one of the most adaptable fleets in the world.
Chadwick C. Deaton, an American citizen, has been a company director since 2012 and the chair of the board of directors since 2019. Before that, from 2004 until 2012, Mr. Deaton held the positions of Chair and Chief Executive Officer of Baker Hughes Incorporated and Executive Chair. He started working at Schlumberger in 1976 and held several worldwide positions, such as Executive Vice President of Oilfield Services from 1998 to 1999 and Senior Advisor from 1999 to 2001. Mr. Deaton served as President, Chief Executive Officer, and Director of Hanover Compressor Company from 2002 until 2004. The University of Wyoming awarded Mr. Deaton a Bachelor of Science in Geology in 1976.
Opinion: $OIH has been performing well but it’s not a large enough purchase to get me adding to oil and gas exposure.
Name: Joseph S Konowiecki
Position: Chairman of the Board
Transaction Date: 2023-03-09 Shares Bought: 100,000 Average Price Paid: $6.62 Cost: $661,610
Company: Alignment Healthcare Inc. (ALHC)
Alignment Healthcare was created in 2013 with a single goal: to improve healthcare one senior at a time. The team experienced firsthand the complexities they encountered as seniors managing care delivery and insurance without an advocate to design an integrated consumer experience that offers comprehensive and excellent care at a reasonable price. The lack of care coordination, inadequate information openness, and misaligned incentives that define the healthcare system have a systemic and disproportionate effect on parents and elders throughout the country. The company’s ultimate objective is to provide this distinctive, advocacy-driven healthcare experience to millions of senior customers in the United States and become the nation’s most trusted senior healthcare brand.
Mr. Konowiecki has served as chairman of the board since January 2014. Mr. Konowiecki is also the chairman and CEO of Apollo Enterprise Solutions, Inc., a pioneer in sophisticated self-managed solutions for big financial businesses. Mr. Konowiecki was formerly the CEO of UnitedHealth Group’s Ovations division’s Future Solutions, which focused on goods and services for people over 50. Mr. Konowiecki has served as general counsel and executive vice president of corporate affairs at PacifiCare Health Systems, Inc, one of the nation’s leading consumer health organizations. In addition, he is a founding member of the legal firm Konowiecki & Rank, where his fields of practice included health care, regulatory, mergers and acquisitions, corporate, partnership, securities, general business, and real estate. Mr. Konowiecki earned a Bachelor of Arts in political science from the University of California, Los Angeles, and a Juris Doctorate from Hastings College.
Opinion: Improving the health of this stock should be management’s priority.
Name: Himanshu Gulati
Position: 10% Owner
Transaction Date: 2023-03-03 Shares Bought: 380,900 Average Price Paid: $6.48 Cost: $2,468,232
Company: Amc Entertainment Holdings Inc. (AMC)
AMC Entertainment Holdings, Inc. operates a theatre exhibition business via its subsidiaries. The corporation owns, operates, or has a stake in theatres around the United States and Europe. AMC Entertainment Holdings, Inc. was established in 1920 and is based in Leawood, Kansas.
Himanshu is the Founder and CIO of Antara Capital, an event-driven hedge fund that invests in loans, bonds, distressed credit, and special circumstance stocks throughout the capital structure.
Opinion: Good god, has the world gone insane? I’m waiting for the new Planet of the Apes.
Name: Robert W Pittman
Position: CEO/Chairman
Transaction Date: 2023-03-03 Shares Bought: 94,518 Average Price Paid: $5.56 Cost: $525,331
Company: iHeartMedia Inc. (IHRT)
iHeartMedia, Inc. is a global media and entertainment corporation. The business is divided into three divisions: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group. The Multiplatform Group section runs Premiere Networks, a nationwide radio network that creates, distributes, or represents syndicated radio programs and services to radio station affiliates, as well as broadcast radio stations, sponsorship, and lives and virtual events. It also provides real-time traffic flow, incident information, weather, sports, and news updates. Podcasting, digital sites, newsletters, digital services, and programs are offered by the Digital Audio Group sector, as is iHeartRadio, a mobile app and web-based service for radio stations, digital-only stations, bespoke artist stations, and podcasts. The Audio and Media Services Group sector is involved in media representation.
Robert Pittman is the Chairman and CEO of iHeartMedia, Inc., America’s audio business. He has been Chairman and CEO since 2011 and Chairman since 2013. He is a co-founder and programmer who headed the team that founded MTV. He has been CEO of MTV Networks, AOL Networks, Six Flags Theme Parks, Quantum Media, Century 21 Real Estate, and Time Warner Enterprises. He became the Chief Operational Officer of America Online, Inc., and later of AOL Time Warner; a founding member of the New York-based Pilot Group investment company; and a co-founder of Casa Dragones tequila. Pittman started his audio career at 15 as an on-air radio announcer in his home state of Mississippi. He has been inducted into the Advertising Hall of Fame and the Broadcasting and Cable Hall of Fame.
Opinion: There is carnage in the footsteps of Robert Pittman.
Name: Philip Liang
Position: Director
Transaction Date: 2023-03-09 Shares Bought: 37,100 Average Price Paid: $2.50 Cost: $92,624
Company: Vicarious Surgical Inc. (RBOT)
Vicarious Surgical Inc. is integrating miniature robotics, computer science, and 3D visualization to create the Vicarious System. This single-incision surgical robot takes physicians inside the patient to conduct minimally invasive surgery or MIS. The company’s breakthrough next-generation robotics technology aims to boost the efficiency of surgical operations, improve patient outcomes, and lower healthcare costs. The company’s goal is to bring the next generation to robotic-assisted surgery to eliminate the inadequacies of open surgery and existing laparoscopic and robot-assisted MIS. A visionary team of engineers from the Massachusetts Institute of Technology, or MIT, leads it. The business has created many prototypes and has pre-submission meetings with the FDA to ensure everyone is on the same page with the regulatory approach. The company intends to submit a de novo application with the FDA for ventral hernia surgeries as the first indication.
Mr. Philip Liang has been a member of the board of directors since the Business Combination Closing in September 2021, and he previously served on the Legacy Vicarious Board. Mr. Liang formerly served as a managing partner of E15VC, a worldwide technology venture firm. He is also a Board Member of CaeliVascular and E15VC. Mr. Liang guides rising growth firms and investors through the venture capital life cycle. Mr. Liang is on the boards of directors of many E15VC-affiliated firms. Mr. Liang graduated from the Massachusetts Institute of Technology in 2006 with a Master of Science in Media Laboratory. Mr. Liang’s credentials for service on the board of directors include past board experience as a member of the Legacy Vicarious Board, as well as business and financial expertise at E15VC.
Opinion: This is an exciting publicly traded venture play into reimaging surgical robotics. These MIT students have A List VC backers and industry partners. Hopefully they didn’t bank with Silicon Valley Bank.
Name: Dennis J Mcgillicuddy
Position: Director
Transaction Date: 2023-03-06 Shares Bought: 200,000 Average Price Paid: $2.18 Cost: $436,500
Company: Franklin Street Properties Corp /Ma/ (FSP)
Franklin Street Properties Corp is a Maryland company that operates to qualify for federal income tax treatment as a real estate investment trust or REIT. The firm is a real estate investment trust (REIT) focusing on commercial real estate investments, especially in office markets. It now operates in just one segment: real estate operations. Rental income from real estate leasing, interest income from secured loans issued on office premises, property dispositions, and fee income from asset/property management and development are the primary revenue streams for real estate operations. The firm invests in infill and central business district office assets in the sunbelt and mountain west areas of the United States, as well as in select opportunistic locations. The firm seeks value-oriented investments focusing on long-term growth, appreciation, and present income.
Dennis J. McGillicuddy has been a board of directors member since May 2002. Mr. McGillicuddy earned a B.A. from the University of Florida and a J.D. from the University of Florida Law School. Mr. McGillicuddy co-founded Coaxial Communications, a cable television firm, with Barry Silverstein in 1968. Coaxial sold its cable systems in 1998 and 1999. Mr. McGillicuddy has served on the boards of many non-profit organizations. He is currently the President of the Board of Trustees of Florida Studio Theater, a professional non-profit theatre organization, and the President, Vice-Chairman, and Director of All-Star Children’s Foundation, a non-profit organization dedicated to establishing a new paradigm for foster care.
Opinion: This is an option on the office market viability.
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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.
The bar is different from selling because the natural state of management is to be a seller. This is because most companies provide significant amounts of management compensation packages as stock and options. Therefore, with selling, we analyze 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 this corporate welfare loophole. 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. I say generally because some 10% shareholders are great investors. Think Warren Buffett, Icahn, and others
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.
A big callout to my assistant Ambreen who sets up this conversation by listing the notable buys that I’ve identified. She probs the 10k for a reasonable description of the business. I’ve found that to be the most accurate and succinct place to find out what a business actually does. The websites and marketing material are just that, poorly disguised marketing material for many. I should know that better than most if you at my past involvement in building the 1st websites for many Fortune 500 companies.
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.
This blog is solely for educational purposes and the author’s own amusement. Don’t rely on this blog. Think of the blog as part of my personal investment journal that I am willing to share with the DIY investor. We welcome your comments on our analysis but please do your own research. Investing with The Insiders Fund is for qualified investors and by Prospectus only. Nothing herein should be construed otherwise. THE INSIDERS FUND prefers to invest in companies at or near prices that management has been willing to invest significant amounts of their own money in but we have no requirement to do so. We also invest in many companies in anticipation of future insider buying or with the expectation that there is none at all.
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Prosperous Trading,
