Insider Buying Week 8-11-23 and the Summer Doldrums

We are not surprised by the momentum of the oil and gas sector, as it was only a matter of time before its strong fundamentals collided with short sellers and skeptical money managers. We wrote last week about the strong signals from Exxon’s latest quarterly earnings. Activist Exxon board member Jerry Ubben’s purchase of Exxon may have been the biggest act of his illustrious career.  CEO Darren Woods is transforming  Exxon into a juggernaut of earnings  AND the undisputed heavyweight of both hydrocarbons, renewables, and carbon capture. Its stands to dominate all.  According to Woods, there is no reason for Exxon to be in a business if they’re not the heavyweight in it.

Lest you mistook when we said buy Exxon, you thought we said, Axon.  You were correct. Buy them both. We also have to thank Axon board member Partovi for repeated purchases that made us revisit the Axon story.  Axon’s Rick Smith is not stopping with Tasers. He has taken Axon from being a weapons supplier to the supplier of bodycams and its library of streaming evidence for the entire judicial system with its cloud-based evidence.com.  He’s not stopping there, either. In short, he wants to run the operating system for governments.  Just like Mark Zuckerberg’s vision of connecting the world, CEO and co-founder, Rick Smith believes in eliminating unnecessary gun violence from law enforcement. If Axxon ends up running the government’s operating system, that’s just a virtuous by-product for the shareholders. Hang on to your Axon.

Earnings season has now largely passed, and a few insiders are putting their toes in the water.

 

Name: Frank Blaise Modruson
Position: Director
Transaction Date: 2023-08-10 Shares Bought: 1,000 Average Price Paid: $254.59 Cost: $254,590
Company: Zebra Technologies Corp (ZBRA)

Name: Bill Burns
Position: Chief Executive Officer
Transaction Date: 2023-08-07 Shares Bought: 1,000 Average Price Paid: $249.40 Cost: $249,400
Company: Zebra Technologies Corp (ZBRA)

Name: Richard L Keyser
Position: Director
Transaction Date: 2023-08-07 Shares Bought: 1,000 Average Price Paid: $248.85 Cost: $248,850
Company: Zebra Technologies Corp (ZBRA)

Name: Anders Gustafsson
Position: Executive Chair
Transaction Date: 2023-08-03 Shares Bought: 4,100 Average Price Paid: $246.39 Cost: $1,010,203
Company: Zebra Technologies Corp (ZBRA)

Zebra Technologies is a global Automatic Identification and Data Capture business pioneer, delivering Enterprise Asset Intelligence solutions. Mobile computing, data capture, radio frequency identification devices, barcode printing, and other workflow automation goods and services comprise the AIDC market. AIDC products that they design, manufacture, and sell include mobile computers, barcode scanners and imagers, RFID readers, specialty printers for barcode labeling and personal identification, real-time location systems, related accessories and supplies such as labels and other consumables, and related software applications. The company also offers comprehensive services like maintenance, technical support, repair, managed and professional services, cloud-based software subscriptions, and robotics automation solutions.

Frank B. Modruson has been the President of Modruson & Associates, LLC, a management consulting firm, since 2015. From 2003 through 2014, Mr. Modruson was the Chief Information Officer at Accenture, a global leader in strategy, consulting, digital, technology, and operations. As CIO, he oversaw information technology strategy, applications, and infrastructure for 281,000 employees. He also led Accenture’s Information Technology Steering Committee and was a member of the Accenture Operating Committee and Global Leadership Council. Before becoming CIO, Mr. Modruson spent 15 years with Accenture in several roles, including Partner. Mr. Modruson now sits on the boards of directors of First Midwest Bancorp, Inc. and Hy Cite Enterprises, LLC. He also volunteers as a firefighter and is on the Board of Directors of the Lyric Opera of Chicago.

Bill Burns has been named CEO of Zebra Technologies, starting March 1, 2023. As Chief Product & Solutions Officer, he was responsible for the strategy, investments, and development of Zebra’s extensive portfolio of products and solutions. Bill was the Chief Executive Officer of Embrane, a Silicon Valley-based venture capital-backed business that Cisco bought in April 2015. Bill was previously the Chief Executive Officer of Spirent Communications, a global leader in test and measurement solutions that is publicly traded on the London Stock Exchange. Bill received his Master of Business Administration from Temple University, his Bachelor of Science in Business Administration from Misericordia University, and his Associate Degree in Engineering from Pennsylvania State University.

Richard L. Keyser has been a director since 2008. For most of his career, Mr. Keyser worked for W.W. Grainger, Inc., an international distributor of maintenance, repair, and operational supplies. Mr. Keyser was named the National Association of Corporate Directors’ 2010 Public Company Director of the Year 2010. From 2009 to 2010, Mr. Keyser served as Grainger’s Chairman Emeritus. Previously, he was Chairman of Grainger from 2008 to 2009, Chairman and Chief Executive Officer from 1995 to 2008, and President and Chief Operating Officer from 1994 to 1995. Mr. Keyser holds a BS from the United States Naval Academy and an MBA from Harvard Business School.

Anders Gustafsson was appointed CEO and a director of Zebra Technologies on September 4, 2007. Mr. Gustafsson was previously the CEO of Spirent Communications plc, a publicly traded telecommunications company. He was Tellabs, Inc.’s senior executive vice president of global business operations before joining Spirent. Mr. Gustafsson previously served as Tellabs International’s president, president of worldwide sales, and vice president and general manager of Europe, the Middle East, and Africa. Mr. Gustafsson holds a master’s degree in business administration from Harvard Graduate School of Business and a master’s degree in electrical engineering from Chalmers University of Technology in Gothenburg, Sweden. He was a Fulbright Scholar and received numerous fellowships and honors for intellectual achievement.

Opinion: BWS Financial issued a short sale report on Impinj (PI). They nailed it as the stock has cratered. PI is a next-level Zebra, so I’m leery of the whole space right now. Inventory normalization from the Pandemic is a big issue in retail. I prefer PI over ZBRA.

 

Name: William Reid Sanders
Position: Director
Transaction Date: 2023-08-07 Shares Bought: 3,000 Average Price Paid: $146.84 Cost: $440,513
Company: Mid America Apartment Communities Inc. (MAA)

MAA, a real estate company, provides high-quality flat living throughout the Southeast, Southwest, and Mid-Atlantic US. The company’s main purpose throughout the real estate investment cycle is to generate steady, stable, and rising cash flow to fund dividends and distributions. They generate revenue, reduce operating expenditures, maintain high occupancy, and reinvest in each apartment community’s income-producing capabilities to give a collective and individual return on investment. Corporate solutions and a decentralized operational structure capitalize on unique market expertise and provide more accountability than a centralized approach. Senior management and various asset management divisions actively assist and optimize property operations and monitor property management performance via extensive reporting systems and on-site visits to support the operational structure.

Mr. Sanders has served as a director since March 2010. Mr. Sanders has served as President of Sanders Properties, LLC since its formation in 2004. William Reid Sanders is a businessman who started Southeastern Asset Management, Inc. and was the CEO of five firms. Mr. Sanders serves as Co-President of Sanders Properties, Inc. and President of Sanders Investments LLC. Mr. Sanders has previously held the positions of Chairman at Two Rivers Capital Management at Kingsmill, Inc., Executive Vice President at Southeastern Asset Management, Inc. and President at Longleaf Partners Funds Trust, Chief Investment Officer at First Tennessee Investment Management, Inc., and Principal at Union Planters Bank, NA. William Reid Sanders attended the University of Virginia for his undergraduate studies.

Opinion: 3.88% dividend yield is not anywhere near what this market requires from a REIT.

Name: Anthony E Terry
Position: EVP, CFO
Transaction Date: 2023-08-07 Shares Bought: 1,800 Average Price Paid: $113.55 Cost: $204,390
Company: Marriott Vacations Worldwide Corp (VAC)

Name: John E JR Geller
Position: President and CEO
Transaction Date: 2023-08-07 Shares Bought: 5,000 Average Price Paid: $112.84 Cost: $564,200
Company: Marriott Vacations Worldwide Corp (VAC)

Marriott Vacations Worldwide Corp is a significant global holiday firm that provides vacation ownership, exchange, rental, resort and property management, and related businesses, products, and services. Marriott Vacations Worldwide was the first significant pure-play independent public firm in the market and helped launch the industry as the first hospitality-branded vacation ownership company. The company has been an independent public corporation since  November 2011, separated from Marriott International. They are a global leader in holiday ownership, with some of the most recognizable brands in the business. They are the sole global developer, marketer, seller, and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, and Hyatt Residence Club brands, as well as Marriott Vacation Club Pulse, an extension of the Marriott Vacation Club brand.

Mr. Terry began his career in 1996 as Manager, Financial Accounting for Marriott Vacation Club International, a division of Marriott International, and quickly advanced through the ranks. He managed many financial and commercial planning responsibilities before heading new product development, brand management, and product supply management. Mr. Terry was best recognized for overseeing the company’s expansion milestones, including Marriott Vacations Worldwide’s separation from Marriott International in 2011. He completed the Executive Development Programme at the Wharton School of Business and the Lodging Leadership Programme at Marriott International.

John Geller is the president and CEO of Marriott Vacations Worldwide Corporation, a leading global holiday provider. Mr. Geller took over as CEO in January 2023. He oversaw the company’s multi-year transition to bring digital and technological solutions and new lines of business to the next generation of travelers. Mr. Geller joined Marriott International in 2005 as senior vice president and chief internal audit and information security officer. From May to December 2008, he was the chief financial officer for the western region of North American lodging operations, after which he moved to the role of the chief financial officer at Marriott Vacation Club International, which later became Marriott Vacations Worldwide, a position held until 2021 when he was appointed president.

Opinion: I have to believe we are near an exhausted top with a spent-out vacation shopper.  I’m penning this at the Delta lounge, and there is no evidence of exhaustion.

Name: Anne Mehlman
Position: CFO
Transaction Date: 2023-08-11 Shares Bought: 1,950 Average Price Paid: $101.62 Cost: $198,159
Company: Crocs Inc. (CROX)

Crocs, Inc. and its consolidated subsidiaries create, market, distribute, and sell casual lifestyle footwear and accessories for women, men, and children worldwide. The company’s goal is to be the global leader in creative casual footwear, combining comfort and elegance with the desired value of consumers. They have brands with broad democratic appeal and low price points corresponding to global megatrends such as casualization and personalization. During the year, the corporation added the HEYDUDE Brand to its portfolio. Given its emphasis on casualization, comfort-led functionality, sustainability, and personalization, it is a fantastic fit for the Crocs Brand and long-term consumer trends.

Anne Mehlman joined Crocs, Inc. as Executive Vice President and Chief Financial Officer in 2018, bringing her over 15 years of global financial and operational experience. Ms. Mehlman previously served as Vice President of Corporate Finance at Crocs, Inc. from 2011 to 2016. She left Crocs in 2016 to become the CFO of Zappos.com, an Amazon-owned ecommerce shop. Ms. Mehlman was previously the Director of Finance of RSC Equipment Rental, now United Rentals. She also worked in finance at Corporate Express (now Staples) and Lockheed Martin. Ms. Mehlman is on the board of Joann, Inc., the top fabric and craft specialty retailer in the United States and a Nasdaq-listed company. She graduated with honors from the University of Colorado at Colorado Springs.

Opinion: More insider buying at stylish brand company CROX. It’s not a huge buy, but Director Smach bought ~$1.5M worth last week. I’m wearing my Hey Dudes now to dinner.

 

Name: Chris Villavarayan
Position: CEO & President
Transaction Date: 2023-08-04 Shares Bought: 33,710 Average Price Paid: $29.67 Cost: $1,000,176
Company: Axalta Coating Systems Ltd. (AXTA)

Axalta Coating System Ltd., a Bermuda-incorporated holding company founded in 2012, is a global manufacturer, marketer, and distributor of high-performance coatings solutions. They have a 150-year history in the coatings sector and are known for producing high-quality products under well-known names backed by market-leading technology and customer service. Throughout history, they have remained at the forefront of their industry by constantly inventing revolutionary coatings technologies to improve client’s goods’ performance, aesthetics, and sustainability while increasing their productivity and profitability. Through an extensive sales staff, technical support organization, and independent, regionally based distributors, the broad global network enables us to address the customer base’s needs. 

Mr. Villavarayan has been the Chief Executive Officer and President of Axalta since January 2023. He also serves on the company’s Board of Directors. Mr. Villavarayan previously held many positions of increasing responsibility during his 22 years at Meritor. He has extensive international experience and experience executing and integrating accretive acquisitions and leading teams to drive transformational change that created significant shareholder value. He most recently served as CEO, President, and a member of the Board of Directors. He received his bachelor’s degree in civil engineering from McMaster University and finished the Wharton Executive Education Advanced Finance Programme.

Opinion: The U.S. has an industrial renaissance in progress with the Inflation Reduction Act, Semiconductor infrastructure, and various government industry reshoring efforts. I don’t like the balance sheet but this is a sizeable buy and bears looking into further. I tend to discount purchases by a new CEO but this is concurrent with a sharp drop in price.

Name: Ronald C JR Renaud
Position: President & CEO
Transaction Date: 2023-08-03 Shares Bought: 83,857 Average Price Paid: $23.96 Cost: $2,008,811
Company: Cerevel Therapeutics Holdings Inc. (CERE)

Name: Paul D. Burgess
Position: Chief Business Development and Strategic Operations Officer
Transaction Date: 2023-08-04 Shares Bought: 21,880 Average Price Paid: $22.93 Cost: $501,794
Company: Cerevel Therapeutics Holdings Inc. (CERE)

Cerevel Therapeutics, Inc., Cerevel, a clinical-stage biopharmaceutical business specializing in neuroscience, takes a focused strategy, leveraging an in-depth knowledge of disease biology, neurocircuitry, sophisticated chemistry, and CNS target receptor pharmacology. The company aims to create transformational medicines for neurological disorders such as schizophrenia, Alzheimer’s disease psychosis, epilepsy, panic disorder, and Parkinson’s disease. Multiple Phase 3 trials for tavapadon in Parkinson’s disease are underway, as are Phase 2 trials for emeraldine in schizophrenia and Phase 2 proof-of-concept trials for darigabat in focal epilepsy. Cerevel has built a seasoned leadership team that combines biotech agility with significant expertise from pharmaceutical backgrounds, encouraging fast drug discovery and development.

Ron Renaud is Cerevel’s President, Chief Executive Officer, and a member of our board of directors. Mr. Renaud was a partner at Bain Capital Life Sciences from September 2022 to June 2023 before joining Cerevel. Previously, he served as chairman and CEO of Translate Bio from 2014 until its acquisition by Sanofi in September 2021. Mr. Renaud was president and chief executive officer of Idenix Pharmaceuticals from 2007 to 2014. Mr. Renaud formerly worked as a biotechnology equities research analyst at J.P. Morgan, Schwab Soundview, and Bear Stearns. Mr. Renaud also worked for Amgen for almost five years, including clinical research, investor relations, and finance positions.

Paul Burgess is Cerevel’s Chief Business Development and Strategic Operations Officer. Mr. Burgess was the chief operating officer and chief legal officer of Translate Bio before joining Cerevel. He was the business development, legal, program management, quality, technical operations, and partner collaborations lead of Translate Bio. Paul Burgess is a biotechnology executive with over 20 years of experience at start-ups and established pharmaceutical corporations. Mr. Burgess formerly worked in the Genetics Institute’s lab. Mr. Burgess received his bachelor’s degree from Merrimack College and his master’s in pharmacology from Northeastern University. He also holds a J.D. from the Northeastern University School of Law.

Opinion: According to Post on the Fly H.C. Wainwright lowered the firm’s price target on Cerevel Therapeutics to $41 from $45 and keeps a Buy rating on the shares. The analyst is “disappointed” that due to lower than expected enrollment in the U.S., and delays in the start-up of certain outside the U.S. sites, data from the potentially registrational studies for emraclidine in schizophrenia, are now expected in the second half of 2024.

 

Name: Elias Sabo
Position: Partner & Chief Executive Officer
Transaction Date: 2023-08-04 Shares Bought: 50,000 Average Price Paid: $22.36 Cost: $1,117,873
Company: Compass Diversified Holdings (CODI)

Compass Diversified Holdings, a Delaware statutory trust, was formed on November 18, 2005. Compass Group Diversified Holdings, LLC, a Delaware limited liability company, was created on November 18, 2005. The Trust and the LLC were founded to buy and manage a portfolio of small and middle-market enterprises based in North America. The company systematic approach to the target markets enables the opportunity to deliberately acquire attractive firms at accretive to their shareholders’ values. For business sellers, the unique financial structure enables them to buy businesses efficiently with little or no third-party financing contingencies and, upon acquisition, offer their businesses significant access to growth capital.

Mr. Sabo is the Chief Executive Officer of Compass Diversified and a member of its Board of Directors. He is a member of the Investment Committee and plays a critical role in identifying and evaluating transaction opportunities by applying the investment principles established by the company. Mr. Sabo is the Chief Executive Officer of Compass Diversified and a member of its Board of Directors. Mr. Sabo directs the financing activities of the company. Mr. Sabo also serves as a director for several of CODI’s current subsidiaries, including Arnold Magnetic Technologies Corporation and Advanced Circuits, Inc., for which he also serves as Chairman of the Board. Before Compass Diversified, Mr. Sabo was with CIBC Oppenheimer, Boundary Partners, and Colony Capital. He is a graduate of Rensselaer Polytechnic Institute.

Opinion: CODI has hed up well, considering it only yields 4.5% and short-term Treasuries are returning ~5%.

 

Name: Maura Shaughnessy
Position: Director
Transaction Date: 2023-08-08 Shares Bought: 36,500 Average Price Paid: $19.46 Cost: $710,425
Company: Aes Corp (AES)

AES, founded in 1981, is a worldwide energy firm advancing the future of energy. Together with their various stakeholders, they improve lives by providing the world with cleaner, smarter energy solutions. Their diversified workforce is dedicated to continual innovation and operational excellence while collaborating with clients on strategic energy transitions and meeting their energy needs today. AES is an industry leader in creating and running solutions that will enable the transition to zero and low-carbon energy sources and accomplish the Paris Agreement’s objective of net-zero emissions by 2050. Today, they see a massive economic potential from the once-in-a-lifetime revolution of the electrical sector, driven by decarbonization, electrification, and digitalization. 

Maura Shaughnessy has been an AES director since July 2021 and is a member of the board’s Financial Audit Committee and Innovation and Technology Committee. Ms. Shaughnessy brings to the AES Board an extensive understanding of the global utilities and energy infrastructure industries from her thirty-two years in the investment management profession. She began her work as a Research Assistant in the domestic macro branch of the Federal Reserve Board of Governors. Ms. Shaughnessy earned a B.S. in Economics from Colby College and an M.B.A. from Dartmouth College’s Tuck School of Business, where she was recognized as an Amos Tuck Scholar. She holds the designation of Chartered Financial Analyst.

Opinion: I want to own a portfolio of electric utilities when the rate hiking cycle is over.  Electricity consumption is set to grow rapidly as the transportation fleet pivots to EVs and the world becomes increasingly digitized.  When is the operative word as utilities are not working well in a higher interest rate environment where they are competing for investor dollars with the Federal Reserve.

 

Name: Gerhard Zeiler
Position: President, International
Transaction Date: 2023-08-07 Shares Bought: 38,000 Average Price Paid: $14.09 Cost: $535,420
Company: Warner Bros. Discovery Inc. (WBD)

Warner Bros. Discovery, Inc., a media firm, distributes material in 50 languages worldwide via various distribution techniques. It also produces, develops, and distributes feature films, television shows, video games, and other material in physical and digital formats through basic networks, direct-to-consumer or theatrical distribution, TV programming, and game licensing. The company owns and operates the Discovery Channel, HGTV, Food Network, TLC, Animal Planet, Investigation Discovery, Travel Channel, Science, MotorTrend, Discovery en Espaol, Discovery Familia, Eurosport, TVN, Discovery Kids, Discovery Family, American Heroes Channel, Destination America, Discovery Life, Magnolia Network, Cooking Channel, ID, the Oprah Winfrey Network, Eurosport, DMAX, and Discovery Home & Health brands, among others. 

Gerhard Zeiler is the President of International for Warner Bros. Discovery. Zeiler has strategic leadership for the company’s brands and joint responsibility for direct-to-consumer in over 220 international regions. He also oversees local theatre production and acquisitions, overseeing nation and region-specific networks and enterprises throughout Latin America, Europe, the Middle East, Africa, and Asia Pacific. Zeiler was appointed President of WarnerMedia foreign in 2020, responsible for Discovery Inc.’s considerable foreign reach following the completion of the Discovery-WarnerMedia merger in April 2022. Before joining Turner, Zeiler was CEO of RTL Group, a branch of German giant Bertelsmann and Europe’s largest television production and transmission company.

Opinion: Stay away from streaming and the media business as the world’s largest and most profitable companies, like Google’s YouTube, Apple’s TV Plus, and Amazon’s Prime, stake out their future world domination.

 

Name: Andrew Paradise
Position: Chief Executive Officer
Transaction Date: 2023-08-07 Shares Bought: 75,000 Average Price Paid: $10.17 Cost: $762,750
Company: Skillz Inc. (SKLZ)

Skillz is a leading mobile games platform that links people in fair, fun, and meaningful competition. The company is re-inventing competitive mobile gaming to construct the internet’s competitiveness layer. The company’s patented technology revolutionizes and democratizes the mobile gaming industry by “leveling the playing field” for developers globally, allowing them to provide gaming experiences that the player community trusts and loves. They are reimagining competitive mobile gaming and growing the mobile gaming business. Regarding user monetization, their technology platform aligns rather than contradicts the goals of developers and gamers. Traditional mobile games include in-game adverts or sales, which cause friction in the user experience, lowering engagement and retention. 

Andrew Paradise is the CEO and Founder of Skillz, the premier mobile gaming platform for fair and enjoyable competition and the world’s first publicly traded mobile esports platform. Skillz, a pioneer of skill-based competition, has become an industry leader in mobile gaming under Paradise’s guidance. Paradise founded firms in various technology fields, including eCommerce and image recognition. His interest in technology and invention began at a young age. He began his professional career in private equity and venture capital but switched to technology in 2008 when he created Double Picture, an advertising technology firm. In 2010, he sold the company to MPA, Inc. Paradise graduated from the University of Massachusetts with a B.A. in English Literature and a Bachelor of Commerce in Economics.

Opinion: I see nothing of interest in this video game pubisher.

 

 

Name: Michael R. Egeck
Position: Chief Executive Officer
Transaction Date: 2023-08-07 Shares Bought: 50,000 Average Price Paid: $6.93 Cost: $346,410
Company: Leslie’s Inc. (LESL)

Name: Steven M Weddell
Position: Chief Financial Officer
Transaction Date: 2023-08-07 Shares Bought: 25,000 Average Price Paid: $6.92 Cost: $173,078
Company: Leslie’s Inc. (LESL)

Leslie’s Inc., founded in 1963, is the only national direct-to-consumer pool and spa care brand, with a physical network of 990 branded sites and a powerful internet presence. As of 2021, they have a market-leading share of around 15% of home aftermarket product spend, their physical network is larger than the sum of our 20 largest competitors, and their digital sales are anticipated to be more than five times that of our largest digital competitor. The company’s devoted team of associates, pool and spa care experts, and experienced service technicians are passionate about providing their customers with the knowledge, tools, and solutions they need to manage and enjoy their pools and spas properly. The company primarily operates in the pool and spa aftermarket industry, one of the most fundamentally appealing consumer categories due to its scale, predictability, and growth prospects.

Mr. Egeck began working for the Company in February 2020. Mr. Egeck previously served as the Chief Executive Officer of PSEB Group. He has more than three decades of experience and a proven track record of driving transformational growth for a variety of brands and business models, including Chief Executive Officer of Eddie Bauer from 2012 to 2020, Chief Executive Officer of Hurley International, a division of Nike, Inc. (from 2011 to 2012); President of True Religion Apparel, Inc. from 2010 to 2011; President of VF Corporation from 2010 to 2011. Mr. Egeck formerly held senior management positions at Columbia Sportswear and Seattle Pacific Industries. Mr. Egeck holds a B.A. in Economics and an M.B.A. from the University of Washington’s Michael G. Foster School of Business.

Mr. Weddell joined the Company in June of 2015. Mr. Weddell worked in the Investment Banking Group at Goldman Sachs & Co. from 2003 to 2015 and was a Managing Director in the Consumer Retail Group and the Merger Leadership Group. Mr Weddell also worked for Arthur Andersen LLP as a Manager in the Assurance practice. Mr. Weddell received his CPA license in California and previously had Series 7 and Series 24 licenses. Mr. Weddell holds a B.S. in Accounting from the University of Southern California and an M.B.A. from the University of Pennsylvania’s Wharton School of Business.

Opinion: This is a tough way to make a living.

Name: Jeffrey Richart Geygan
Position: Director
Transaction Date: 2023-08-03 Shares Bought: 155,925 Average Price Paid: $5.91 Cost: $920,992
Company: Rocky Mountain Chocolate Factory Inc. (RMFC)

Rocky Mountain Chocolate Factory, Inc., a Delaware corporation, and its subsidiaries, including its operating subsidiary, Rocky Mountain Chocolate Factory, Inc., a Colorado corporation, are an international franchisor, confectionery manufacturer, and retailer. They were founded in 1981 and are headquartered in Durango, Colorado. The Company’s income and profitability are mostly generated from its franchised/licensed retail system of chocolate and other confectionery items. They also sell candies in certain areas outside the retail store network. Their main competitive advantages are brand recognition, reputation for the quality, variety, and taste of their products, the ambiance of their stores, the expertise in the manufacture of chocolate candy products and the merchandising and marketing of confectionery products, and the control and training infrastructures they have put in place to ensure consistent customer service and the execution of successful practices and techniques at stores.

Mr. Geygan was appointed to the Board of Directors in February 2018. Mr. Geygan is the CEO and President of Global Value Investment Corp., an investment research and advising firm he created in 2007. Before establishing Global Value Investment Corp., Mr. Geygan worked as a Senior Portfolio Manager at UBS Financial Services, Inc. Mr. Geygan has worked in investment management and finance since 1987 and is an expert in financial statement analysis. Mr. Geygan has taught undergraduate and graduate-level courses at IE University in Madrid, Spain, the University of Wisconsin-Milwaukee Lubar School of Business, and the College of Charleston. Mr. Geygan also serves on the Department of Economics Advisory Board at the University of Wisconsin – Madison.

Opinion: Value investment professional apparently has a sweet tooth.

Name: Michael O Randolfi
Position: EVP and CFO
Transaction Date: 2023-08-09 Shares Bought: 50,000 Average Price Paid: $5.38 Cost: $268,808
Company: Sabre Corp (SABR)

Name: Kurt Joseph Ekert
Position: CEO and President
Transaction Date: 2023-08-08 Shares Bought: 100,000 Average Price Paid: $5.34 Cost: $534,000
Company: Sabre Corp (SABR)

Sabre Corporation was established in Delaware in December 2006. Sabre makes travel a reality. The company is a multinational travel technology company. They collaborate with airlines, hotels, travel agencies, and other travel partners to sell, distribute, and fulfill travel. The company’s comprehensive travel marketplace connects travel buyers with the world’s largest travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines, and tour operators. They also provide a comprehensive suite of leading software solutions to travel suppliers, ranging from airline and hotel reservation systems to solutions for managing day-to-day hotel operations. With next-generation digital solutions, they are dedicated to assisting businesses in operating more efficiently, increasing revenue, and providing personalized traveler experiences.

Mike Randolfi, Sabre’s executive vice president and chief financial officer, manages the company’s global finance organization and is responsible for all finance and controls, reporting, and corporate growth initiatives. He is in charge of people, planning, and processes that give important and timely insights, allowing business executives to make decisions that support the Sabre strategy, deliver long-term value to the stockholders, and, ultimately, achieve financial success. Mike has held CFO positions at Adtalem Global Education, Groupon, Orbitz Worldwide, and, most recently, BFA Industries. Mike holds an MBA from Emory University’s Goizueta Business School and a bachelor’s degree in finance and accounting from the University of South Florida.

Kurt Ekert is the president and CEO of Sabre, a leading travel and hospitality technology platform. He was named CEO in April 2023 and oversees a global team of highly skilled employees. Kurt joined Sabre in January 2022 as president, bringing 25 years of worldwide operations leadership and governance experience in technology, travel, and tourism and a track record of growth and turnaround performance. Before joining CWT, Kurt was EVP and Chief Commercial Officer at Travelport, overseeing the operational turnaround that allowed the company to successfully IPO in 2014. Kurt has a BS from the University of Pennsylvania’s Wharton School, an MBA from the University of South Carolina, and served as a US Army officer. He now serves on Sabre, Passur Aerospace, and ZYTLYN Technologies boards.

Opinion: A case study in disruption. Sabre should have owned this space instead of ceding it to  Booking, and Expedia.

Name: Michael J Christenson
Position: Chief Executive Officer
Transaction Date: 2023-08-07 Shares Bought: 187,170 Average Price Paid: $3.87 Cost: $724,348
Company: Entravision Communications Corp (EVC)

Entravision Communications Corp is a global leader in advertising solutions, media, and technology. The company’s operations include integrated, end-to-end advertising solutions across many media, including the Internet, television, and audio. They offer financial data in three groups based on the type of advertising medium: digital, television, and audio. Their audio and television efforts reach and engage Hispanics in the United States. They mediate between mostly worldwide media businesses and advertising customers or their ad agencies through the digital commercial partnerships division, the largest of the digital business groups. Some customers also receive invoicing, technology, and other support services, such as strategic marketing and training.

Mike Christenson was a Managing Partner at Mayten Research, a private investment and advisory firm, from 2022 to 2023, and the President and Chief Operating Officer of New Relic, Inc., a cloud-based observability platform that engineers use to build and manage enterprise systems, from 2019 to 2021, and a member of New Relic, Inc.’s Board of Directors from 2018 to 2021. Mr. Christenson formerly worked as a Managing Director at Allen & Company, a private investment banking business, from 2010 until 2019, where he offered advice and investment banking services to software startups. Mr. Christenson was President and Chief Operating Officer of CA, Inc., an enterprise systems management and security software firm, from 2005 to 2010.

Opinion: They say any business could be a good buy at a certain price. I’m not so sure of that.

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You can be an insider, too– by clicking here

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 with any stock market experience 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 of 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, we analyze unusual patterns with selling, 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 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.

This blog is solely for educational purposes and the author’s own amusement.  Think of the blog as part of my personal investment journal that I am willing to share with the DIY investor.  There are also many parts that I am not willing to share if I think it could influence trading action or be detrimental to the Fund’s partners. We could be long, short, or have no position at all in any of the stocks mentioned and express no written or implied obligation to disclose any of that.

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,