Let me ask you this-Can you afford not to be an insider? With insiders largely absent due to the 3rd quarter earnings blackout- investors’ anxieties, fears, and uncertainties revealed themselves last Friday. The rout in the markets portends an even uglier 2nd half of September. Is this any surprise?
A weakened President was attacked on all sides, by his own party wanting someone else to run and by the rabid right on charges of corruption and senility. We have an unjust war brought on by our long-time nemesis, Russia. Some say we are not providing enough support for Ukraine, and others say we are on the verge of WWW III by supporting them at all. I have my thoughts, but a divided nation is dangerous when Russia, China, Iran, North Korea, and others make no bones about wanting to replace “Pax Americana” with something more to their liking. This looks more and more like the environment that kindled WWII.
Who knows where the impeachment inquiry can lead- we have an unprecedented amount of acrimony in this country. A former President is interviewed on Face the Nation, and at least half the country thinks he should be in jail, and the remainder thinks he should run for a second term, who knows, maybe President for life. The Federal Reserve is determined to squelch the supply-side shock of inflation by bleeding the patient, somehow in name of the dismal science of economy. Raising rates causing great harm to the economy is the only tool they seem to possess.
Lastly, California and other states’ war against hydrocarbon producers will only result in higher energy prices for all and little to show for global carbon reduction as the rest of the world is on a relentless march to more and more energy, not less. Without readily available substitutes, price inelasticity will only drive up the price of the most important component of inflation, energy.
Name: Joel D Anderson
Position: President & CEO
Transaction Date: 2023-09-08 Shares Bought: 3,100 Average Price Paid: $161.50 Cost: $500,650
Company: Five Below Inc (FIVE)
Five Below, Inc. was founded in Pennsylvania in January 2002. Five Below is a premier high-growth discount shop that offers trend-right, high-quality products that tweens, teens, and others adore. They feel that life is better when customers are free to “let go & have fun” in an extraordinary experience with limitless possibilities. Based on their management’s experience and industry understanding, the customer-centric, experience-first, innovative approach to retail has resulted in a fiercely devoted client base and generated universal appeal across several age groups outside their target audience. The company also sells products online through its fivebelow.com e-commerce website and on-demand third-party delivery service, allowing its clients to order online and receive simple same-day delivery.
Mr. Anderson, 58, has been a director since February 2015, when he was named President and Chief Executive Officer. From July 2014 to January 2015, Mr. Anderson served as the President and Chief Operating Officer before becoming President and Chief Executive Officer. Before joining Five Below, Mr. Anderson was President and Chief Executive Officer of Walmart.com from 2011 to 2014 and the divisional Senior Vice President of Walmart, Inc.’s Northern Plains division from 2010 to 2011. Before joining Walmart, Mr. Anderson was President of Lenox Group, Inc.’s retail and direct business units and held numerous senior positions at Toys “R” Us Inc. for 14 years. Mr. Anderson now serves on the audit and pay committees of Sprouts Farmers Market, where he is a director.
Opinion: Buy low and sell high. That’s the way you traditionally make money in the stock market. I doubt if it will be any different here but FIVE doesn’t seem cheap to me even after earnings have stagnated for the last three years with a projected 28 times earnings on the high end of company projections.
Name: Eugene I Jr Lee
Position: Director
Transaction Date: 2023-09-13 Shares Bought: 8,670 Average Price Paid: $57.65 Cost: $499,818
Company: Advance Auto Parts Inc (AAP)
Advance Auto Components Inc. is a North American leader in automotive aftermarket components, supplying professional installers, “do-it-yourself” clients, and independently owned operators. The company stores and branches stock a wide range of brand-name, original equipment manufacturers and owned brand automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy-duty trucks. They began as Advance Stores Company, Incorporated in 1929, and functioned as a general merchandise shop until the 1980s. The company began selling car parts and accessories to DIY clients in the 1980s. They began their professional delivery program in 1996, and the sales to professional customers have consistently expanded since 2000.
Mr. Lee currently serves as Chairman and Chief Executive Officer of Darden Restaurants, Inc., the owner, and operator of Olive Garden, LongHorn Steakhouse, Bahama Breeze, Cheddar’s Scratch Kitchen, Seasons 52, The Capital Grille, Eddie V’s, and Yard House restaurants in North America, from January 2021 to May 2022. Mr. Lee served as Darden’s President and CEO from February 2015 to January 2021, President and Interim CEO from October 2014 to February 2015, and President and Chief Operating Officer from September 2013 to October 2014. From October 2007 to September 2013, he was President of Darden’s Specialty Restaurant Group following Darden’s acquisition of RARE Hospitality International, Inc., where he had been President and a member of the Board of Directors since 2001. Mr. Lee has been a Darden Board of Directors member since February 2015.
Opinion: The auto strike will be bullish for parts giant Advanced Auto Parts. My guess is this strike worsens and gets prolonged as the media starts to focus on the proposed 4 day 32 hour work week and not the inflation adjusted wage hikes. The strike has already taken on political messaging, Dems vs Republicans. Even before the strike, insiders were buying this parts giant.
Name: Jose Miguel Fernandez de Castro
Position: Director
Transaction Date: 2023-09-12 Shares Bought: 10,000 Average Price Paid: $32.94 Cost: $329,440
Company: Montrose Environmental Group Inc. (MEG)
The Montrose Environmental Group Inc. industry is highly fragmented, with no one market leader. The company is ideally positioned to become the industry’s premier platform by focusing on environmental solutions. They offer a wide range of environmental services to their private and public sector clients throughout the life cycle of their needs, whether they are launching new projects, maintaining operations, decommissioning operations, rehabilitating assets, managing the effects of climate change, or responding to unexpected environmental disruption. The integrated platform has catalyzed organic growth, and they have expanded on it through smart acquisitions. They focus on innovation to improve the quality of information they can provide to clients (such as more accurately measuring methane and greenhouse gas emissions or identifying variations of Per- and poly-fluoroalkyl substances, or PFAS, in water) and to provide better solutions to their environmental needs (such as the efficient removal of PFAS from contaminated water).
Mr. Fernandez de Castro has been a Director since December 2013. Mr. Fernandez de Castro has been the Senior Executive Vice President and Chief Financial Officer of ExamWorks Group, Inc., a provider of independent medical examination services, since March 2009. Mr. Fernandez de Castro previously worked for TurboChef Technologies, Inc., first as Senior Vice President, then as Chief Financial Officer, Vice President, and Controller. Mr. Fernandez de Castro formerly worked with PracticeWorks, Inc. in various capacities. Mr. Fernandez de Castro began his career at BDO Seidman, LLP, in the audit services area. Mr. Fernandez de Castro graduated from the University of North Carolina at Chapel Hill with a Bachelor of Arts in Economics and Spanish and a Master of Accounting. Mr. Fernandez de Castro is a Certified Public Accountant in Georgia.
Opinion: How can this idea not work? For starters Richard Perlman can stop sitting on the stock price dumping millions of dollars worth of his stock. Then the Company should try out growing revenues in a profitable manner. Why is that so hard?
Name: Eric Bjerkholt
Position: Chief Financial Officer
Transaction Date: 2023-09-11 Shares Bought: 10,000 Average Price Paid: $29.65 Cost: $296,492
Company: Mirum Pharmaceuticals Inc. (MIRM)
Mirum Pharmaceuticals Inc. is a biopharmaceutical firm specializing in discovering, acquiring, developing, and commercializing new medicines for debilitating rare and orphan illnesses. The company concentrates on diseases with a high unmet medical need and a clear biology for treatment. Livmarli, a novel, orally administered, minimally absorbed ileal bile acid transporter (“IBAT”) inhibitor, is approved in the United States for the treatment of cholestatic pruritus in patients with Alagille syndrome (“ALGS”) aged one year and older and in Europe for the treatment of cholestatic pruritus in patients with ALGS aged two months and older. Volixibat, a new, oral, minimally absorbed drug designed to block IBAT, is being developed to treat adult patients with cholestatic liver disorders. Volixibat is being developed to treat primary sclerosing cholangitis (“PSC”) and primary biliary cholangitis (“PBC”). Volixibat has been examined for up to 48 weeks in over 400 adults.
Eric Bjerkholt joined Mirum as chief financial officer in September 2023. Eric came to Mirum from Chinook Therapeutics, Inc., where he was the chief financial officer in charge of financial reporting, planning and budgeting, internal controls, investor relations, facilities, and information technology. Before joining Chinook, he was CFO of Aimmune Therapeutics, Inc. Eric has worked at Sunesis Pharmaceuticals, Inc., IntraBiotics Pharmaceuticals, Inc., LifeSpring Nutrition, Inc., and Age Wave, LLC. Eric spent nearly a decade in healthcare investment banking at J.P. Morgan & Company, Inc. before joining the industry. He now serves on the boards of directors of CalciMedica, Inc., Cerus Corporation, and Surrozen, Inc. Eric has an MBA from Harvard Business School and a Cand.Oecon degree from the University of Oslo in Norway.
Opinion: Drugs for rare diseases is a popular and proven path for developmental biotech. Risky bets are not something the Insiders Fund is good at and I doubt the readers of this blog are fond of.
Name: William P Donnelly
Position: Director
Transaction Date: 2023-09-08 Shares Bought: 20,200 Average Price Paid: $24.85 Cost: $501,978
Company: Quanterix Corp (QTRX)
Quanterix Corp is a life sciences firm that has created next-generation, ultra-sensitive digital immunoassay technologies to help with life sciences research and diagnostics. The company systems are built around their unique digital “Simoa” detecting technology. Their Simoa bead-based and planar array platforms enable customers to detect protein biomarkers in blood, serum, and other fluids that are often undetectable using conventional, analog immunoassay technologies, as well as researchers to define and validate the function of novel protein biomarkers that are only present in very low concentrations. These capabilities offer their customers insights into the role of protein biomarkers in human health that are not feasible with other existing technologies, and they enable researchers to gain unique insights into the health-disease continuum.
Mr. Donnelly offers a wealth of senior leadership experience in the life science equipment sector, including 21 years as executive vice president and chief financial officer at Mettler-Toledo International Inc. He was in charge of finance, investor relations, supply chain, and information technology at Mettler Toledo. During his employment, he strategically guided the company from a leveraged buyout to an IPO and advised it when it successfully went public. He brings to Quanterix a wealth of experience. Mr. Donnelly earned a Bachelor of Science in business administration from John Carroll University, where he serves as Chairman of the Board of Trustees. Mr. Donnelly also serves as lead independent director and head of Ingersoll Rand Inc.’s nominating and corporate governance committee.
Opinion: Insiders nailed this stock and we highlighted a while ago in this blog post on 8/12/22. Its interesting to see what insiders were buying before the Federal Reserve set out on the fastest interest rate hikes in 45 years.
Name: James P Henderson
Position: Chief Financial Officer
Transaction Date: 2023-09-14 Shares Bought: 10,000 Average Price Paid: $22.99 Cost: $229,900
Company: Vitesse Energy Inc. (VTS)
Vitesse Energy Inc. is an independent energy firm that focuses on repaying cash to stockholders by owning financial interests in oil and natural gas wells as a non-operator. They acquire, develop, and produce non-operated oil and natural gas properties in the United States, normally operated by premier oil firms, especially in the Bakken and Three Forks formations of North Dakota and Montana’s Williston Basin. Since the start, the company has created a strong and diverse asset base through property acquisitions, development activities, and adopting proprietary non-operating platforms and processes that use their substantial data resources. The properties’ position and concentration in some of North America’s leading unconventional oil and natural gas resource plays and their technical and data capabilities provide them with acquisition and development prospects with considerable long-term value.
James “Jimmy” Henderson has been named Vitesse’s Chief Financial Officer, beginning September 1, 2023, and is responsible for the Company’s entire financial operations. Jimmy has over 30 years of expertise in the oil and gas business in management, finance, and accounting. He was most recently Executive Vice President of Finance and CFO of Whiting Petroleum, from its bankruptcy escape in September 2020 to its merger with Oasis Petroleum in July 2022, becoming Chord Energy. Jimmy previously held the same position at SRC Energy and Kodiak Oil & Gas, where he helped each company grow through acquisitions and capital expenditures. Jimmy holds a B.B.A. in Accounting from Texas Tech University and an M.B.A. from Regis University.
Opinion: There is another more established royalty operators with higher dividend yield I am invested in. You can find it by searching the blog. They had insider buying too.
Name: Joseph Molluso
Position: Co-President & Co-COO
Transaction Date: 2023-09-13 Shares Bought: 15,000 Average Price Paid: $17.17 Cost: $257,481
Company: Virtu Financial Inc. (VIRT)
Virtu Financial Inc. is a prominent financial organization that uses cutting-edge technology to provide liquidity to global markets and creative and transparent trading solutions to clients. They provide their clients with a complete product package that includes execution, liquidity sourcing, analytics, and broker-neutral, multi-dealer workflow technology platforms that use the global market structure experience and scaled, multi-asset infrastructure. The product offerings enable clients to trade on hundreds of venues in over 50 countries and a wide range of asset classes, including global equities, Exchange Traded Funds, options, foreign exchange, futures, fixed income, cryptocurrencies, and many other commodities. Their multi-asset analytics platform offers various pre- and post-trade services, data products, and compliance solutions that their clients rely on to invest, trade, and manage risk across global markets.
Joe Molluso is Virtu’s Co-President and Chief Operating Officer. Mr. Molluso joined Virtu as Chief Financial Officer in 2013. Mr. Molluso returned to Virtu in 2020 after a brief sabbatical in 2019 to serve as Chief Financial Officer of Capitolis. During his time at the company, Mr. Molluso has been in charge of all areas of Virtu’s finances, operations, and day-to-day management. Mr. Molluso began his career with J.P. Morgan in 2006. Mr. Molluso worked as an investment banker, providing strategic guidance to financial institutions focusing on market structure-related enterprises. Mr. Molluso has assisted on several historic deals involving global exchanges and clearing firms. Before joining J.P. Morgan, he worked as an investment banker at DLJ and its successor, Credit Suisse, where he helped build the worldwide financial technology group. Mr. Molluso graduated from New York University with an MBA.
Opinion: I’ve followed this flash trader for quite some time. Michael Lewis wrote a book, Flash Boys, about these algo quant black box traders or whatever you want to call them. I think systematic is the terms they like to use now. The book was written in 2014 and Netflix picked up the rights to it. No movie has been made yet as the whole thing based on its stock price looks kind of boring to me. Perhaps Goldman, Citadel or another hedge fund type firm will roll this up into their mix. That’s the only play as this kind of business will never get a high multiple. AI is already the new new thing.
Name: Timothy A Johnson
Position: CFO & CAO
Transaction Date: 2023-09-13 Shares Bought: 20,000 Average Price Paid: $17.16 Cost: $343,210
Company: Victoria’s Secret & Co. (VSCO)
Victoria’s Secret & Co. is a women’s intimate apparel and beauty specialty retailer known by Victoria’s Secret, PINK, and Adore Me. They have over 910 stores in the United States, Canada, and China, as well as our websites, www.VictoriasSecret.com, www.PINK.com, and www.AdoreMe.com, as well as other internet channels worldwide. The Company also comprises a goods sourcing and production function that serves us and their overseas partners. They operate as a unified segment, serving clients globally through retail and online channels. The company operates two category-defining intimates and beauty brands, Victoria’s Secret and PINK, that aim to inspire and uplift our customers at every stage of their lives, as well as Adore Me. This technology-led, digital-first, innovative intimates brand serves women of all sizes and budgets at all stages of life.
Tim Johnson is Victoria’s Secret & Co.’s Chief Finance and Administrative Officer. Most recently, he was CFO of Victoria’s Secret and CFO and Chief Administrative Officer of Big Lots. He joined Victoria’s Secret & Co. in 2021, bringing seven years of public company CFO experience, as well as broad experience in strategic planning, financial planning and analysis, reporting, accounting, tax, and investor relations, as well as risk management, asset protection and security, and distribution centers. Tim also served as Big Lots’ interim co-CEO 2018 alongside the company’s chief merchant. He began his career in public accounting at Coopers & Lybrand, then moved on to corporate finance jobs with Limited Brands.
Opinion: This is heavy lift resurrecting a classic brand. Perhaps time has just moved on and women don’t need to be celebrated with sexy lingerie. I don’t know the answer to this but the revenue trends should be going up and not down.
Name: Bruce R Chizen
Position: Director
Transaction Date: 2023-09-13 Shares Bought: 500,000 Average Price Paid: $5.79 Cost: $2,896,350
Company: ChargePoint Holdings Inc. (CHPT)
ChargePoint Holdings, Inc. is a prominent electric vehicle charging technology provider. ChargePoint is a global leader in networked charging solutions for commercial, fleet, and residential customers in North America and Europe. ChargePoint thinks its business strategy is unique in the EV charging sector. ChargePoint supplies networked charging hardware linked via cloud-based software services backed by extended parts and labor warranties. ChargePoint distributes these solutions to business, fleet, and residential customers to enable electrification and has built a robust network of channel partners and distributors to support its growth. ChargePoint does not sell networked charging hardware without its software, does not normally own or operate EV charging infrastructure, does not monetize drivers, and does not rely on profits from selling electricity.
Bruce Chizen, the CEO of Adobe Systems, Inc., concentrated on the client to develop Adobe into one of the world’s largest and most diverse software organizations. As CEO, Bruce tripled Adobe’s sales and transformed a company known for design goods into a major software power. Before becoming CEO, he was executive vice president of worldwide products and marketing at Adobe and vice president and general manager of both the professional graphics and consumer divisions. Before joining Adobe, Bruce worked at Claris Corporation, Microsoft, and Mattel Electronics. He graduated from Brooklyn College of the City University of New York and is currently the executive chairman of Informatica Corp, a venture partner at Voyager Capital, and a member of the boards of Oracle, Synopsys, Ancestry.com, and several non-profits.
Opinion: We made some money buying ChargePoint at this price points a few years ago when the enthusiasm for EVs was at its height. I sold high and watched it round trip. I am not keen on the charging business as your local electric utlity will always be the low cost provide for this. When it turns into a great business, expect them to dominate it. I would not place too much significance on this insider purchase as Michael Line of Linse Capital just sold $4.8 million of his ~4,0494,407 shares
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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,
