The Nasdaq 100 notched its best-ever first half of a year. In a classic reversion to the mean, the worst-performing sector usually becomes one of the best-performing ones. The Nasdaq 100 will need to rise nearly another 200 points to recoup the amount lost since December of 2021. I doubt if it could have recouped these losses this fast, though, without the market hype about generative AI.
Nasdaq had been on an unsustainable tear since the beginning of the 2020 work-from-home hyper stimulus-infused Pandemic. I have no idea how long this can last, but I can say with reasonable confidence that these have been extraordinary times. Money lost from this ramp, such as the valuation bubble from zero interest rates and the helicopter cash dump to fight the novel coronavirus, will be very hard to recover. History may not repeat itself, but it certainly rhymes.
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Name: Hadi Partovi
Position: Director
Transaction Date: 2023-06-23 Shares Bought: 25,000 Average Price Paid: $191.10 Cost: $4,777,388
Company: Axon Enterprise Inc. (AXON)
Axon, a global pioneer in public safety technology, is developing the future public safety operating system by combining a variety of hardware devices and cloud software solutions at the cutting edge of modern policing. Axon aims to protect life to promote peace, justice, and strong institutions. The moonshot goal is to cut gun-related deaths among police officers and the broader public in the United States in half by 2033. Axon’s offering includes TASER energy devices, body-worn cameras, in-car cameras, cloud-hosted digital evidence storage solutions, productivity tools, and real-time operations capabilities.
Mr. Partovi is the CEO and co-founder of Code.org, a non-profit education organization, and a director on the boards of Axon Enterprise and Convoy. Mr. Partovi has served as a strategic adviser or an early investor in several digital firms, including Facebook, Dropbox, Uber, Airbnb, SpaceX, and Zappos. Mr. Partovi was Senior Vice President of Technology at MySpace from 2009 to 2010 and President and Co-Founder of ILIKE, Inc. from 2006 to 2009. Mr. Partovi was General Manager, Microsoft MSN Entertainment and MSN.com from 2002 to 2005 and Co-Founder and VP of Product and Professional Services for TELLME Networks, Inc. from 1999 to 2001. Mr. Partovi graduated from Harvard University with a B.A. and M.S. in Computer Science, summa cum laude.
Opinion: Partovi has been a reliable insider when it comes to buying shares of AXON. Of course, it doesn’t hurt that the company is one of the great growth stories of the last decade. AXON doesn’t come to mind when people talk of great cloud stories, but it has some of the best metrics of any company out there.
According to Axon’s 2023 Q1 earnings report, their annual recurring revenue (ARR) growth rate was 49% year over year, and their net revenue retention (NRR) was 121%.
Name: Pierce Norton
Position: Director
Transaction Date: 2023-06-29 Shares Bought: 24,607 Average Price Paid: $60.96 Cost: $1,500,018
Company: Oneok Inc (OKE)
Name: Brian L Derksen
Position: Director
Transaction Date: 2023-06-28 Shares Bought: 4,900 Average Price Paid: $59.59 Cost: $291,989
Company: Oneok Inc (OKE)
Oneok Inc is a leading midstream service provider and owner of one of the nation’s premier NGL systems, connecting NGL supply in the Rocky Mountain, Permian, and Mid-Continent regions with key market centers. The company also owns a vast network of gathering, processing, fractionation, transportation, and storage assets. Through vertical integration throughout the midstream value chain, the business applies fundamental competencies of collecting, processing, fractionating, transporting, storing, and selling natural gas and NGLs to offer clients premium services while producing consistent and sustainable profit growth.
Pierce H. Norton is the president and CEO of ONEOK and a member of the ONEOK Board of Directors. Norton formerly served as president and CEO of ONE Gas, Inc. for over seven years and was a member of the ONE Gas board of directors. Norton has been with ONEOK for over ten years, joining the organization in 2004. Norton was senior vice president of commercials of ONEOK and ONEOK Partners before the separation of ONE Gas in January 2014. Norton, a native of Alabama, obtained a Bachelor of Science Degree in mechanical engineering from the University of Alabama in Tuscaloosa in 1982. He also completed the Advanced Management Programme at Harvard Business School.
Brian L. Derksen is the Chairman of Dye & Durham Corp. and the Independent Chairman of Dye & Durham Ltd. In addition, Mr. Derksen serves on the boards of ONEOK, Inc., Brookshire Grocery Co., and FISH Technologies LLC. Brian L. Derksen formerly served as Deputy Chief Executive Officer of Deloitte LLP and Global Deputy Chief Executive Officer of Deloitte Touche Tohmatsu Ltd. He graduated with honors from the University of Saskatchewan and The Fuqua School of Business.
Opinion: OKE’s current dividend yield of 6.19% looks enticing compared to the ephemeral rates the Fed is offering. The world is going to need far more electricity and natural gas is going to generate much of it for the foreseeable future.
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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 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, are horrendously poor. Also, planned sales that 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 on which we are trying to read the tea leaves. 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 probes 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.
You can be an insider, too– by clicking here
Prosperous Trading,
