It’s that familiar time of year again when insiders are blocked from transacting in their own stock due to pending 2nd quarter earnings. At least two of the notable buys were stocks The Insiders Fund is already pretty heavily invested in: Exxon and Biohaven. So, at least, the research toll on me will be minimal as I’ve spent this blistering weekend supervising a landscape project at my house. That’s the featured image if you’re wondering what that has to do with stocks. It doesn’t.
Name: Maria S. Dreyfus
Position: Director
Transaction Date: 2023-06-17 Shares Bought: 18,310 Average Price Paid: $109.25 Cost: $2,000,386
Company: Exxon Mobil Corp (XOM)
Exxon Mobil Corporation was founded in 1870 and is headquartered in Spring, Texas. Exxon Mobil Corporation is involved in the exploration and production of crude oil and natural gas in the United States and abroad. The company operates in four segments: upstream, energy products, chemical products, and specialty products. The Upstream section seeks out and produces crude oil and natural gas. The Energy Products business provides fuels, aromatics, catalysts, and licensing services. They sell their products under the names Exxon, Esso, and Mobil. The Chemical Products business produces and markets petrochemicals such as olefins, polyolefins, and intermediates. The Specialty items section sells performance items such as lubricants, base stocks, waxes, synthetics, elastomers, and resins. The company also manufactures, trades, transports, and sells crude oil, natural gas, petroleum, petrochemicals, and other specialty products.
Maria S. Dreyfus has been a board member of Exxon Mobil Corp since January 2024. Maria Jelescu Dreyfus is the CEO and founder of Ardinall Investment Management, an investment firm focusing on sustainable investing and resilient infrastructure. Ms. Dreyfus worked as a portfolio manager and managing director of Goldman Sachs Investment Partners for 15 years until starting Ardinall in 2017. Ms. Dreyfus now serves on the boards of Cadiz and CDPQ, one of Canada’s major pension plans. She is Co-Chair of Columbia University’s Women in Energy program and Vice-Chair of the Center on Global Energy Policy’s advisory board. Ms. Dreyfus is also a member of the MIT Corporation’s Development Committee and the Economics Department’s Visiting Committee.
Opinion: Exxon is pretty much doing everything right from my point of view, steadily increasing or maintaining production and reserves while investing in nonhydrocarbon energy plays like the gigantic lithium metal prospects in the Arkansas smack-over formation. It’s all the more ironic that energy stocks are a laggards when the American consumer is saying not just yet to the end of internal combustion engines.
Name: Berkshire Hathaway Inc / Warren E Buffett
Position: 10% Owner
Transaction Date: 2023-06-13 Shares Bought: 2,947,611 Average Price Paid: $59.70 Cost: $175,976,799
Company: Occidental Petroleum Corp (OXY)
Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas. Occidental Petroleum Corporation and its subsidiaries buy, explore, and develop oil and gas properties in the United States, the Middle East, and North Africa. The corporation has three business segments: oil and gas, chemical, midstream, and marketing. The company’s Oil and Gas division explores, develops, and produces oil and condensate, natural gas liquids, and natural gas. The Chemical segment manufactures and sells basic chemicals such as chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride, as well as vinyls like vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment collects, processes, transports, stores, purchases, and markets crude oil, condensate, NGLs, natural gas, CO2, and electricity.
Warren Edward Buffett, an American businessman and philanthropist, was born on August 30, 1930, in Omaha, Nebraska. He is regarded as the most successful investor of the 20th and early 21st centuries. Buffett, sometimes known as the “Oracle of Omaha,” was the son of Howard Homan Buffett, a Nebraska politician. After receiving his B.S. from the University of Nebraska in 1950, he attended Columbia University’s School of Management and studied under Benjamin Graham. Buffett relocated to Omaha in 1956 and purchased a controlling share in textile manufacturer Berkshire Hathaway Inc. in 1965, which he utilized as his principal investment vehicle.
Opinion: It is a mystery why investors shun hydrocarbon stocks when their prospects and current financials are so promising. At least the world’s most famous investor’s purchase should speak louder than anything I can write. He keeps avowing that Buffett will not seek control of OXY; still, he has scooped up more shares of Occidental Petroleum over each of the past nine trading sessions, driving his gigantic stake in the Houston-based oil and gas producer to almost 29%, according to regulatory filings.
Name: Bruce Car
Position: Chief Scientific Officer
Transaction Date: 2023-06-17 Shares Bought: 30,000 Average Price Paid: $33.58 Cost: $1,007,490
Company: Biohaven Ltd. (BHVN)
Biohaven Ltd. is a global clinical-stage biopharmaceutical company dedicated to discovering, developing, and commercializing life-changing therapies for people suffering from chronic neurological and neuropsychiatric disorders, particularly rare ones. The company’s highly trained leadership team has a proven track record of obtaining novel medicine approvals for migraine, depression, bipolar disease, and schizophrenia. They are developing therapies for diseases with few or no treatment options, including 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 function. The company has recruited a highly qualified team of senior executives and neuroscience drug developers who bring together a fast-paced, results-driven biotech approach with pharmacological research and development expertise.
Dr. Car joined Biohaven on August 1, 2022, after serving as Chief Scientific Officer at Agios Pharmaceuticals since January 2020, where the research focus was initially oncology and genetically defined diseases before narrowing the portfolio to exclusive GDD methods. Before joining Agios, Bruce worked with Bristol-Myers Squibb and its legacy firms for 25 years, covering all therapeutic areas and medication types. In early 2017, he became the first head of the BMS Translational Medicine function, where he assembled a cohesive team of over 300 scientists and specialists spanning biomarkers, data science, and pharmaco-diagnostics. During his time at BMS, Dr. Car helped to advance roughly 250 internally found drug candidates and over 18 drug registrations. Dr. Car has departed BMS as the interim head of Drug Discovery. Dr. Car earned a degree in Veterinary Medicine from The University of Melbourne in Victoria, Australia, and a Ph.D. from Cornell University in New York, USA. He is certified in anatomical and clinical pathology.
Opinion: It’s nearly impossible to have an edge in biotech when hedge funds employ physicians and research Ph.D’s in life sciences. More than ever, investors must rely on value-creating management and insider buying. In the case of Biohaven, we have both working in your favor.
Name: Timothy E Bixby
Position: Chief Financial Officer
Transaction Date: 2023-06-13 Shares Bought: 20,000 Average Price Paid: $15.23 Cost: $304,650
Company: Lemonade Inc. (LMND)
Lemonade, Inc. was established in 2015 and is based in New York, New York. The company offers a variety of insurance products through multiple channels in the United States, Europe, and the United Kingdom. Their insurance products cover stolen or damaged property, as well as personal liability, which protects consumers if they are at fault for an accident or damage to another person or their property. The company also provides renters, homeowners, auto, pet, and life insurance, as well as landlord plans. Additionally, it serves as an agent for other insurance firms. The company was previously known as Lemonade Group, Inc. until changing its name to Lemonade, Inc.
Tim Bixby has been the Chief Financial Officer since June 2017. Since 2021, Tim has been the Audit Chair and Board Director of Rent the Runway. Before joining Lemonade, Mr. Bixby was Chief Financial Officer of Shutterstock, Inc., a digital content licensing marketplace, from 2011 to 2015. From 1999 to 2011, he was the Chief Financial Officer, President, and a member of the board of directors at LivePerson, Inc.. This company provides cloud mobile and online corporate messaging solutions. He earned a Bachelor of Arts in Mathematics from Dartmouth College and a Master of Business Administration from Harvard Business School.
Opinion:
Name: Mahbod Nia
Position: Chief Executive Officer
Transaction Date: 2023-06-20 Shares Bought: 35,000 Average Price Paid: $14.32 Cost: $501,347
Company: Veris Residential Inc. (VRE)
Veris Residential, Inc. is a forward-thinking, environmentally and socially conscious real estate investment trust (REIT) that primarily owns, operates, acquires, and develops holistically-inspired, Class A multifamily properties that meet today’s residents’ sustainability-conscious lifestyle needs while seeking to positively impact the communities it serves and the planet as a whole. The company is led by an experienced management team and a Board of Directors, and it is founded on leading corporate governance principles, a best-in-class and sustainable approach to operations, and an inclusive culture focused on equality and meritocracy.
Mahbod Nia has been Veris Residential’s CEO and a member of the Board of Directors since June 2020. Under Mr. Nia’s leadership, Veris Residential has advanced its strategic transformation to a pure-play multifamily REIT by simplifying and focusing its business, strengthening its balance sheet, and improving its operational platform to pursue the company’s new strategic direction. Mr. Nia has over 20 years of real estate expertise, including multifamily and office investing, management, finance, and advisory positions. Before joining Veris Residential, Mr. Nia was CEO of NorthStar Realty Europe Corp., a NYSE-listed REIT focused on European assets, where he also served on the investment committee and the board of directors. Mr. Nia previously held several positions in real estate groups at Goldman Sachs and Citigroup Inc., where he began his career. Mr. Nia has a degree in Economics for Business from the University of Westminster and a master’s in Economics and Finance from the University of Warwick (UK).
Opinion: A socially conscious REIT yielding a paltry 1.5% isn’t going to cut it. Something else must be at play.
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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 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,
