Insider Buying Week 11-01-24

We are in a malaise. It’s that period when most insiders are restricted from trading in their company’s stock due to the upcoming quarterly earnings. But let’s not kid ourselves. If you want to sell, there is a way. You can fire up the ole 10B-5 1 get out of jail plan and fire away.
Paying close attention to what insiders do with their money has historically been a successful investment method. However, it doesn’t always outperform the market, but it does keep exuberance in check when herd behavior runs markets higher than good economic sense should dictate. With that in mind, I am sharing a recent Wall Street Journal article, Corporate Insiders are Sitting Out the Stock Market Rally is no surprise. According to the author,  “A review of insider purchases, leaving aside sales, also appears to show little enthusiasm lately. Officers and directors of U.S. companies bought $2.3 billion of their companies’ stock this year through September, the lowest amount over such a period since 2014, according to data from the Washington Service. Last year, they bought $3 billion in the first nine months.”

Name: John B Replogle
Position: Director
Transaction Date: 2024-10-30 Shares Bought: 2,240 Average Price Paid: $112.60 Cost: $252,222
Company: Crocs Inc. (CROX)

Crocs, Inc. was formed in 1999 and is based in Broomfield, Colorado. Crocs, Inc., through its subsidiaries, designs, develops, manufactures, promotes, distributes, and sells casual lifestyle footwear and accessories for men, women, and children under the Crocs and HEYDUDE brands in the United States and abroad. Clogs, sandals, slides, flips, wedges, platforms, socks, boots, charms, flip-flops, sneakers, and slippers are among the footwear options available from the brand. It sells its products through wholesalers, retail stores, e-commerce websites, third-party marketplaces, and kiosks/store-in-stores.

John Replogle has been the Director of Crocs Inc. since January 2024. Mr. Replogle has decades of global leadership experience with significant consumer brands such as Seventh Generation, Inc., Burt’s Bees, Inc., Unilever’s Skin Care business, and Diageo Plc. He is now on the boards of directors for two public companies (Grove Collaborative, Inc. and Wolfspeed, Inc.), having previously served on the board of directors for Sealy Corporation. Mr. Replogle is also a founding partner of One Better Ventures, LLC, a venture capital firm that invests in consumer-focused companies with a positive global impact. Mr. Replogle earned his undergraduate degree from Dartmouth College in 1988 and his MBA from Harvard Business School in 1993.

Opinion: How the mighty fall. CROX has been on a high for some time since its merger with fast-growing HEYDUDE brands. It’s not unusual for great companies to stumble; on Nov 1, they stumbled and fell hard with downgrades from Raymond James about sales declines, margin pressure, lower visibility, and slow direct-to-consumer sales. Guggenheim took their numbers number down to $152 from $188 but was kind enough to keep the buy rating. HEYDUDE softness is the culprit. You can only buy an ailing brand in retail. BofA Cuts Croc’s target but defends shares. My next cheap foot wrapper will be a Croc.  We bought the name-brand stock

Name: Guy Gecht
Position: Director
Transaction Date: 2024-10-24 Shares Bought: 2,500 Average Price Paid: $81.12 Cost: $202,800
Company: Logitech International S.A. (LOGI)

Logitech International S.A. was established in 1981 and is based in Lausanne, Switzerland. Logitech International S.A. and its subsidiaries invent, manufacture, and distribute software-enabled hardware solutions that link people worldwide to work, create, game, and stream. The company offers products for gamers and streamers, including mice, racing wheels, headsets, keyboards, microphones, and streaming services; corded and cordless keyboards and keyboard-and-mouse combinations; pointing devices, such as wireless mice and wireless mouse products; conference room cameras, such as ConferenceCams; controllers for video conferencing room solutions; PC-based webcams, including streaming cameras and VC webcams; tablet accessories, which include It offers its products through a network of distributors, merchants, and e-tailers, who then resell to retailers, value-added resellers, systems integrators, and other distributors. The corporation sells its goods under Logitech, Logitech G, and others.

Guy Gecht served as Logitech’s interim CEO from June to December 2023 following the retirement of Bracken Darrell. Before this appointment, he was a non-executive member of Logitech’s board of directors since September 2019. Mr. Gecht is the former co-CEO of E.Merge Technology Acquisition Corp., a “blank check” “special purpose acquisition” company formed to effect a business combination with a software or internet technology company, a position he held between 2020 and October 2022. Mr. Gecht joined EFI in 1995 and has held many positions, including president, vice president, general manager of Fiery products, and director of software engineering. Before joining EFI, Mr. Gecht held executive positions at Interro Systems, Inc., ASP Computer Products, Inc., and Apple Israel. Mr. Gecht is the Lead Independent Director on the Board of Directors of Check Point Software Technology Ltd. Mr. Gecht earned a bachelor’s degree in computer science and mathematics from Ben Gurion University in Israel.

Opinion: According to Post on the Fly Barclays lowered the firm’s price target on Logitech to $103 from $105 and keeps an Overweight rating on the shares. The company reported a solid quarter, with healthy demand growth and margins above the long-term model, the analyst tells investors in a research note. The firm thinks the updated second half of the year guide is

Name: Andrew C Florance
Position: President and CEO
Transaction Date: 2024-10-25 Shares Bought: 14,731 Average Price Paid: $74.67 Cost: $1,099,966
Company: Costar Group Inc. (CSGP)

CoStar Group, Inc. was founded in 1987 and is headquartered in Washington, D.C. The company offers information, analytics, and online marketplace services to commercial real estate, hospitality, residential, and allied professions in the United States, Canada, Europe, Asia Pacific, and Latin America. The company provides CoStar Property, an inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar Sales, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics, which allows users to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytics tool that provides tenant information. It also offers Leasing, a tool for capturing, managing, and maintaining lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially zoned parcels; CoStar Real Estate Manager, a software solution for real estate lease administration, portfolio management, and lease accounting compliance; and CoStar Risk Analytics and Investment.

Andy Florance is the founder and CEO of CoStar Group. Since the company’s inception in 1986, he has spearheaded the digitization of the global real estate market, allowing consumers to discover properties, insights, and connections that benefit their businesses and lives. Mr. Florance is also Chairman of the Cathedral Chapter at Washington National Cathedral and serves on the boards of nine additional companies. Mr. Florance has previously served as Chairman of the Governors Board at Beauvoir School, Chairman of St. Andrew’s School, Co-Chairman of the Children’s National Medical Center Foundation, and a Sierra Club member.  Florance graduated from Princeton University with a B.A. in Economics and received an honorary doctorate from Virginia Commonwealth University in 2019.

Opinion

Business Overview

CoStar Group is a leading provider of information, analytics, and online marketplaces for the commercial real estate industry. They offer a wide array of digital services, including leasing marketplaces, sales comparable information, decision support, contact management, tenant information, property marketing, and industry news2. Their business is built around a proprietary database of commercial real estate information that they have developed and enhanced for over 30 years.

Competitive Moat

CoStar Group has a wide moat. Their competitive advantages include:

• Proprietary Data: Their extensive and comprehensive database is a significant asset.
• Switching Costs: High costs for customers to switch to another provider due to the integration and reliance on CoStar’s data.
• Network Effects: The more users they have, the more valuable their data becomes.

5-Year Revenue Growth Rate

Over the past five years, CoStar Group has demonstrated consistent revenue growth. Their annual revenue for 2023 was $2.46 billion, with a growth rate of 12.49% year-over-year. For the twelve months ending September 30, 2024, their revenue was $2.67 billion, up 11.67% year-over-year.

Recurring Revenue and Net Retention Rate

CoStar Group has a strong financial model with over 95% of subscription revenue and 90% renewal rates for contracts with terms of twelve months or longer. However, specific figures for recurring revenue percentage and net retention rate are not readily available in the public domain.

Management

CoStar Group is led by a team of experienced professionals, including:

• Andrew C. Florance: President & CEO
• Scott T. Wheeler: CFO
• Michael R. Klein: Chairman

Profitability Comparison with Competitors

CoStar Group has maintained strong margins and high free cash flow. Their net income increased by 176% and EBITDA increased by 320% in the third quarter of 2024 compared to the second quarter. While specific comparisons with competitors are not readily available, CoStar Group is recognized as an industry leader and has been included in the S&P 500 Index and Nasdaq 100 Index5.

Recent News and Stock Prices

Recent news that moved CoStar Group’s stock prices includes:

• Acquisition of Visual Lease: CoStar Group announced the acquisition of Visual Lease, a leading lease administration and accounting platform, on October 22, 2024.
• Third Quarter Results: CoStar Group reported an 11% year-over-year increase in third-quarter revenue and a significant increase in net income and EBITDA.

Costar looks impressive a in vital but tough overbuilt area. This stock could work  This is the first buy Mr. Andrew after the subsequent four sales, all substantially greater in mumber. This is on to watch but not to get on the cross fo.

 Name: Mark E Tryniski
Position: Director
Transaction Date: 2024-10-29 Shares Bought: 5,000 Average Price Paid: $50.36 Cost: $251,803
Company: Bancorp Inc. (TBBK)
Name: Todd J. Brockman
Position: Director
Transaction Date: 2024-10-29 Shares Bought: 4,517 Average Price Paid: $49.94 Cost: $225,574
Company: Bancorp Inc. (TBBK)

The Bancorp, Inc. was established in 1999 and is based in Wilmington, Delaware. The corporation serves as the bank holding company for The Bancorp Bank, National Association, which offers banking goods and services in the United States. It provides a variety of deposit products and services, including checking, savings, time, money market, commercial accounts, overdrafts, and certificates of deposit. In addition, the company offers securities-backed and insurance policy cash value-backed lines of credit, investor advisor financing, lease financing for commercial and government vehicle fleets, including trucks and other special purpose vehicles, commercial real estate bridge loans, and small business administration loans. The company also provides bill and other payment services, debit and prepaid card issuance, card and bill payment, automated clearing house processing, and internet banking services. 

Mark Tryniski joined Bancorp Inc.’s Board of Directors on May 29, 2024. Tryniski is now President and CEO of Community Bank NA, a Director at the Independent Bankers Association of New York State, a Director at the Everson Museum of Art of Syracuse and Onondaga County, and a Director at Pursuit Lending. He previously held the positions of President, Chief Executive Officer, and Director at Community Bank NA from 2003 to 2023, Independent Director at CONMED Corp. from 2007 to 2022, Director at Community Financial System, Inc. from 2003 to 2024, Treasurer and Director at New York Bankers Association, Inc., and Partner at PricewaterhouseCoopers LLP. Mr. Tryniski received his undergraduate degree from the State University of New York College at Oswego.

Todd Brockman joined Bancorp Inc.’s Board of Directors on October 1, 2024. Brockman has over 25 years of experience as a senior executive in the payment and financial technology industries. He served as Senior Vice President and General Manager of Visa DPS, one of the world’s major issuer processors. Brockman was promoted to Senior Vice President, Global Head of Issuing Solutions for Visa Inc., and General Manager of Visa DPS in 2021, a position he held until July 2023 when he retired. Brockman has also held other industry leadership positions, such as President of Galileo Processing, Inc. and Global Head of Prepaid for Visa Inc. Mr. Brockman holds a Bachelor of Arts degree in Social Sciences from the University of California and an MBA from the University of California, Davis Graduate School of Management.

Opinion:Return on assets and return on equity for the quarter ended September 30, 2024, amounted to 2.5% and 26%, respectively, compared to 2.7% and 26%, respectively, for the quarter ended September 30, 2023. Book value per common share at September 30, 2024 was $16.90 compared to $14.36 per common share at September 30, 2023, an increase of 18%. As of September 30, 2024, tier 1 capital to average assets, tier 1 capital to risk-weighted assets, total capital to risk-weighted assets and common equity tier 1 to risk-weighted assets ratios were 9.86%, 13.62%, 14.19% and 13.62%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp Bank, National Association, remains well capitalized under banking regulations.

Name: Marcus Lemonis
Position: President and CEO
Transaction Date: 2024-10-27 Shares Bought: 156,985 Average Price Paid: $6.37 Cost: $999,994
Company: Beyond Inc. (BYON)

Beyond, Inc. was founded in 1997 and is based in Midvale, Utah. Beyond, Inc. is an online retailer of furniture and home goods products in the United States and Canada. Bed Bath & Beyond’s product line includes furniture, bedding and bath, patio and outdoor gear, area rugs, tables and cookware, décor, storage and organization, small appliances, home improvement, and other items. The company sells its products and services through its e-commerce platform, which is accessible via its mobile app and includes bedbathandbeyond.com, bedbathandbeyond.ca, and overstockgov.com. It also provides businesses with the opportunity to advertise their products or services on its website; Marketplace, a service that allows its partners to sell their products through third-party sites; product sales to international customers via third-party logistics providers; and Supplier Oasis, a single integration point that allows partners to manage their products, inventory, and sales channels, as well as access multi-channel fulfillment services through its distribution network.

Marcus Lemonis was appointed Executive Chairman of the Board of Directors on February 16, 2024. Lemonis has been a Beyond director since October 2023, and the board’s Chairman since December 2023. Lemonis provides over 25 years of experience in company development and retail expansion, as well as a wide understanding of creating and scaling businesses from the inside out. He is currently the Chairman and CEO of Camping World Holdings, Inc., where he is in charge of creating both Camping World and its sister membership and services firm Good Sam from the bottom up to become the World. He is well-known for his business expertise, which was emphasized on CNBC’s The Profit when he famously urged small firms to focus on their people, processes, and goods to attain stability and profitability.

Opinion:

 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,