We are deep in the blackout period when most companies prohibit insiders from trading in their stock prior to quarterly earnings. It’s been ugly for the bulls, but there might be some green shoots. You can be an insider, too– by clicking here
Name: Henry A Fernandez
Position: Chairman and CEO
Transaction Date: 2024-04-25 Shares Bought: 13,000 Average Price Paid: $465.92 Cost: $6,056,955
Company: MSCI Inc. (MSCI)
Name: CD Baer Pettit
Position: President & COO
Transaction Date: 2024-04-25 Shares Bought: 7,500 Average Price Paid: $459.41 Cost: $3,445,575
Company: MSCI Inc. (MSCI)
MSCI Inc. is a top provider of crucial decision-support tools and solutions to the worldwide investment community. The company’s mission-critical services assist investors in navigating the complexities of a changing financial landscape and making better investment decisions. The company helps its clients to identify and analyze important risk and return drivers, as well as design more effective portfolios, by leveraging their knowledge of the global investing process and their experience in research, data, and technology. The tools and solutions assist investors in defining their investment universe, informing and analyzing asset allocation and portfolio construction decisions, measuring and managing portfolio performance and risk, implementing sustainable, climate-focused, and other investment strategies, conducting performance attribution, constructing and managing exchange-traded funds and other indexed financial products, and facilitating reporting to stakeholders. MSCI Inc. was founded in 1998 and is headquartered in New York, NY.
Henry Fernandez, MSCI’s Chairman and CEO, has guided the firm for nearly three decades to its current position as a leading provider of indexes, portfolio creation, and risk management tools, as well as environmental, social, governance, and climate data and research. Before becoming CEO, Mr. Fernandez was a Managing Director at Morgan Stanley, where he worked on emerging-markets business strategy, equity derivatives sales and trading, mergers and acquisitions, mortgage-backed securities, and corporate finance. Mr. Fernandez is on the boards of directors/trustees of Royalty Pharma plc, Stanford University, King Abdullah University of Science and Technology, the Hoover Institution, the Memorial Sloan-Kettering Cancer Centre, the Foreign Policy Association, and Catholic Charities of the Archdiocese of New York. Mr. Fernandez has a BA in economics from Georgetown University, an MBA from Stanford University, and is pursuing a doctorate in economics at Princeton.
Baer Pettit, MCI’s president and chief operating officer, oversees the company’s day-to-day operations and leads its business functions, which include client coverage, marketing and communications, product management, research and development, technology, data services, and operations. He’s been president since 2017. He is a member of MSCI’s Board of Directors, the company’s Executive Committee, and the executive in charge of its innovation effort. He also serves on the Index Industry Association’s Board of Directors. Baer has held several executive-level positions since joining MSCI in 2000, including head of European client coverage and global head of products, client coverage, marketing, and indexing until becoming COO in 2015. He earned a Master of Arts in History from Trinity College, Cambridge University, as well as a Master of Science from Georgetown University’s Walsh School of Foreign Service.
Opinion: These are the kinds of insider buy signals I like. Senior officers who have been at the Company long are taking advantage of the recent sharp share price drop. Even though this is my ideal mix of insider buying activity, the industry growth rates don’t excite me. The recurring revenues from index funds are great, but the highly competitive landscape of index, emerging, ESG funds, and ETFs is a mature business that doesn’t excite me. Analytics has some sex appeal, and the possibility of new carbon trading initiatives is enticing.
Post on the Fly had comments from several analysts, both upgrades and downgrades. “Barclays analyst Manav Patnaik lowered the firm’s price target on MSCI to $600 from $700 and kept an Overweight rating on the shares after the Q1 report. Higher than expected cancels and “frustration selling” drove the shares down 13% post-earnings, the analyst tells investors in a research note. However, he sees a “once a year” buying opportunity for one of its “highest quality names.”
Name: Vlad Coric
Position: Chief Executive Officer
Transaction Date: 2024-04-22 Shares Bought: 121,951 Average Price Paid: $41.00 Cost: $4,999,991
Company: Biohaven Ltd. (BHVN)
Name: John W Childs
Position: Director
Transaction Date: 2024-04-22 Shares Bought: 195,121 Average Price Paid: $41.00 Cost: $7,999,961
Company: Biohaven Ltd. (BHVN)
Name: Gregory Bailey
Position: Director
Transaction Date: 2024-04-22 Shares Bought: 48,780 Average Price Paid: $41.00 Cost: $1,999,980
Transaction Date: 2024-04-24 Shares Bought: 25,503 Average Price Paid: $39.18 Cost: $999,169
Company: Biohaven Ltd. (BHVN)
Biohaven Ltd. is a global clinical-stage biopharmaceutical business that focuses on researching, developing, and commercializing life-changing medicines for patients suffering from chronic neurological and neuropsychiatric illnesses, particularly rare ones. The company’s skilled management team has a proven track record of winning novel drug approvals for illnesses such as migraine, depression, bipolar disorder, and schizophrenia. They are working on therapies for diseases with few or no treatment options, such as Kv7 ion channel modulation for epilepsy and neuronal hyperexcitability, glutamate modulation for OCD and Spinocerebellar Ataxia, myostatin inhibition for neuromuscular diseases, and brain-penetrant Tyrosine Kinase 2/Janus Kinase 1 inhibition for immune. The company has assembled a highly competent team of senior executives and neuroscience medication developers who mix a quick-thinking, results-driven biotech approach with pharmacological research and development capabilities.
Dr. Vlad Coric, MD, is the Chief Executive Officer and Director of Biohaven Pharmaceutical Holding Co. Ltd. and an Associate Clinical Professor at Yale School of Medicine. He serves on the Boards of Biohaven Pharmaceutical Holding Co. Ltd., Th Lady of Mercy Academy, Pyramid Biosciences, Inc., and Vita Therapeutics, Inc. Dr. Coric previously worked as a Group Director-Global Clinical Research for Bristol Myers Squibb Co. and President of the Connecticut Psychiatric Society. He earned his doctorate from Wake Forest School of Medicine.
Mr. John W. Childs is the chairman and partner of J.W. Childs Associates, L.P., a private equity business. He co-founded J.W. Childs Associates in 1995. Mr. Childs served as Senior Managing Director of the Thomas H. Lee Company from 1991 to 1995 before creating J.W. Childs Associates. In this role, he was responsible for originating, assessing, negotiating, and overseeing leveraged buyout transactions for the THL funds. Before joining THL, Mr. Childs worked for Prudential Insurance Company of America for seventeen years, holding several senior roles in the investment business, culminating in his position as Senior Managing Director of the Capital Markets Group. He is the Chairman of Sunny Delight and a director at Kosta Browne, Esselte, Mattress Firm, WS Packaging, and SIMCOM. Before the transaction, he served as Chairman of the Board of CHG Healthcare Services. Mr. Childs holds a B.A. from Yale University and an M.B.A. from Columbia University.
Dr. Bailey has worked in the healthcare industry as an entrepreneur, leader, and financier for the past 15 years. He is currently the Chairman of the Board of Portage Biotech Inc. and has previously served on the boards of 16 public businesses. He was a former director and funder of Medivation Inc., as well as a co-founder of Ascent Healthcare Solutions, VirnetX Inc., an internet security company, and Duramedic Inc., a medical product company. Prior positions in the investment and financial services sector included Managing Director of Gilford Securities Inc., Managing Director of Knightsford Bank Corp, Senior Managing Director positions at Viscogliosi Brothers and the LXV Prosperity Fund, Founder and General Manager of the ABN Private Equity Fund, Co-Founder of Euro-American Mercantile Bancorp, and Co-Founder and CEO of V-Fund Investments, Ltd. Dr. Bailey earned his medical degree from the University of Western Ontario and then worked as an emergency department physician for ten years.
Opinion: Insiders at Biohaven have been some of the most reliable insiders to follow. I have blogged repeatedly about this. Childes bought $40.9 Million of stock last October 2022 at $9.50 per share on secondary. Last week he bought another $8 million at $41. Of course he’s playing with the house’s money at this point but I think you have to go with the winning team.
Name: William C Rhodes III
Position: Director
Transaction Date: 2024-04-23 Shares Bought: 50,000 Average Price Paid: $19.37 Cost: $968,500
Company: Regions Financial Corp (RF)
Regions Financial Corporation, a financial holding company, offers banking and bank-related services to both individual and business customers. It operates in three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment provides commercial banking services such as commercial and industrial, commercial real estate, and investor real estate lending, equipment lease financing, deposit products, securities underwriting, and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. The Consumer Bank division offers consumer banking products and services such as residential first mortgages, home equity lines of credit, consumer credit cards, other consumer loans, and deposits. The Wealth Management section provides credit products, retirement and savings solutions, trust and investment management, asset management, and estate planning services to individuals, enterprises, public institutions, and non-profit organizations. The company was created in 1971 and is based in Birmingham, Alabama.
William C. Rhodes is currently the chairman, president, and CEO of AutoZone, Inc. Mr. Rhodes also serves on the boards of Dollar General Corp., Retail Industry Leaders Association (former Chairman), and Memphis Tomorrow, as well as Treasurer and Director of The Lorraine Civil Rights Museum Foundation. William C. Rhodes was previously a Manager at Ernst & Young LLP. Mr. Rhodes earned an undergraduate degree from the University of Tennessee and an MBA from the University of Memphis.
Opinion: Bank are hard to analyze. Landmines on the balance sheet don’t show themselves to the outside observer. You have to assume that the office market may be in terminal decline due to changing distributed work.
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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,
