I’ve been struggling to explain the speculative frenzy I sense in the markets. Stocks routinely go up and down 20% on earnings or even something as trivial as an analyst upgrade or downgrade yet the underlying market seems calm, benign even. The VIX, which is the current mathematic model for measuring short-term volatility, steadily trends lower. The VIX is a measure of the volatility of the S&P 500, and by now, everyone understands that the capitalization-weighted nature of that index dominates the recent stock market performance. The popular but obsolete already term ‘Magnificent 7’ refers to a handful of mega tech stocks that account for ~25% of the market weight and a heavy surplus of the recent gains.
Today’s frenetic trading reminds me of the stock market craze surrounding MEME stocks and AMC, which led to the movie The Dumb Money. That mania was easily explained as COVID stimulus checks were sent out to everyone while we were forced to stay home from work or self-imposed COVID-19 lockdowns. This is all widely believed to have led to an enormous jump in at-home day traders. The advent of the brokerage company Robin Hood was symbolic of the times.
We assume the “Dumb Money” was just that—a cohort of mostly young, inexperienced investors who lost most, if not all, their money. Fast-forward to today and Robin Hood is making all-time highs along with the most favorite generational investment choice, Bitcoin. How could this be happening if the “Dumb Money” went bust? Maybe they didn’t all go broke. Maybe they were just waiting.
So, where is this volatility coming from if the meme traders are gone? Does this volatility exist, or am I allowing my bias to distort my argument? In other words, is this more than just a lifetime of experience talking? I searched for a “VIX on the equal-weighted index,” but that doesn’t exist yet.
I’m certain that it’s more than a speculative frenzy around the promise of AI. Although AI enthusiasm certainly exists, it doesn’t explain the rest of the stocks that make huge moves up or down any day. I’ve come up with a theory for this volatility, but I have no way of proving that it’s right.
I am of the baby boomer generation, a ‘boomer’ as my kids call me. Like every generation before me, I will bequeath most of my wealth to my children. My generation was the largest population group in history until our children, the millennial generation, came along. We are also the wealthiest, unmerited or not. The inevitable greatest transfer of wealth in history is underway to a largely inexperienced investor class. How would my kids act? How would they learn? There is no other explanation for the current frenzy in trading.
You might feel left out of the thundering herd. FOMO is one side of the coin; fear is the other.
Name: Mark D Mclaughlin
Position: Director
Transaction Date: 2024-03-06 Shares Bought: 3,030 Average Price Paid: $165.45 Cost: $501,313
Company: Snowflake Inc. (SNOW)
Snowflake enables organizations to learn, grow, and connect with their data-driven peers. Snowflake addresses the decades-long issue of data silos and data governance. The company platform, which makes use of the public cloud’s elasticity and performance, allows businesses to unify and query data for a wide range of use cases. The company was created in July 2012 and went public in October 2014, following two years in stealth mode. The company believes in a data-connected world in which enterprises can easily discover, exchange, and unlock the value of data. To fulfill this ambition, they offer the Data Cloud, a network that enables Snowflake clients, partners, developers, data producers, and data consumers to break down data silos and gain value from rapidly growing data volumes in a secure, controlled, and compliant manner. The company platform is the cutting-edge technology that enables the Data Cloud, allowing clients to consolidate data into a single source of truth, deliver valuable business insights, create data applications, and exchange data and data products.
Mark was Chief Executive Officer and Chairman of the Board of Palo Alto Networks, a worldwide cybersecurity company, from 2011 to 2018, and will continue to serve as Vice Chairman of the Board through December 2022. From 2009 until 2011, Mark was President and CEO of VeriSign, Inc., a provider of internet infrastructure services. Prior to that, Mark held many positions at VeriSign, including Executive Vice President, Products and Marketing. President Barack Obama named him to the President’s National Security Telecommunications Advisory Committee in January 2011, where he served until April 2023. Mark is now the Chairman of the Board of Directors of Qualcomm, Inc. and a Director of Snorkel. AI. Mark has a B.S. from the United States Military Academy at West Point and a J.D. from the Seattle University School of Law.
Opinion: Three years of stock market gains were wiped out in one day due to Q4 earnings and the CEO’s resignation. I think I’d wait on this name in spite of the numerous Wall Street analysts flogging their buy recommendations. A recent slew of acquisitions tells me buying growth is not the answer.
Name: Philip L Johnson
Position: EVP & Chief Financial Officer
Transaction Date: 2024-02-29 Shares Bought: 12,000 Average Price Paid: $119.65 Cost: $1,435,800
Company: Jazz Pharmaceuticals plc (JAZZ)
Jazz Pharmaceuticals plc is a multinational biopharmaceutical business whose mission is to innovate and improve the lives of patients and families. The company is dedicated to discovering life-changing medications for patients suffering from critical diseases, many of which have few or no treatment alternatives. The patient-centered and science-driven strategy drives forward-thinking research and development throughout their extensive portfolio of breakthrough oncology and neurological therapies. The company growth strategy is based on executing commercial launches and ongoing commercialization initiatives; advancing robust research and development, or R&D, programs and delivering impactful clinical results; effectively deploying capital to strengthen the prospects of meeting their short- and long-term goals through strategic corporate development; and delivering strong financial performance.
Mr. Johnson was named Chief Financial Officer in March 2024. Mr. Johnson has substantial experience in worldwide financial leadership positions in the pharmaceutical sector, as a management consultant, and as an investment banker in the United States and Europe. Mr. Johnson worked as Eli Lilly and Company’s group vice president and treasurer from January 2018 until February 2024. Mr. Johnson joined Eli Lilly and Company in 1995 and rose through the ranks, eventually becoming group vice president and treasurer. Before joining Lilly, Mr. Johnson was a management consultant for McKinsey & Co. and worked with investment banks in Milan, Italy, and Chicago, Illinois. Mr. Johnson earned a Bachelor of Science from the University of Illinois and a Master of Management from Northwestern University’s Kellogg School of Management.
Opinion: This is a misleading signal. Newly hired officers and directors are often bound to purchase shares in their new companies. It’s a corporate form of welfare and commitment. I don’t read much into it, and neither should you.
Name: More Avery
Position: Director
Transaction Date: 2024-02-29 Shares Bought: 7,000 Average Price Paid: $67.75 Cost: $474,250
Company: Solaredge Technologies Inc. (SEDG)
Solaredge Technologies Inc. is a major developer of optimal inverter solutions that have transformed the way power is captured and handled in solar systems. The company’s direct current, optimized inverter system increases power generation while lowering the cost of energy produced by the PV system, resulting in a higher return on investment, or ROI. The DC-optimized inverter system also provides extensive and advanced safety features, more design freedom, effective integration with SolarEdge storage solutions, and improved operation and maintenance, or O&M, with module-level remote monitoring. The typical SolarEdge DC-optimized inverter system includes inverters, Power Optimizers, a communication device that connects to a cloud-based Monitoring Platform, and, in many cases, a battery as well as additional smart energy management solutions and devices like EV chargers and load controllers. As part of the hardware sales, they also offer energy management software, which regulates, manages, and optimizes energy generation, storage, and consumption in their systems.
Mr. Avery More has been a member of the Board of Directors since 2006. Mr. More was the Company’s sole seed investor through his firm, ORR Partners I, L.P., and has participated in each subsequent round. Mr. More joined Menlo Ventures as a venture partner in 2013 and specializes in investing in technology firms. Before joining Menlo Ventures, Mr. More was president and CEO of CompuCom Systems Inc. from 1989 to 1993. Mr. More is currently on the board of directors for Vidyo, Inc., QualiSystems Ltd., Takipi, BuzzStream, and Intendu Ltd. Mr. More possesses unique qualities that qualify him to serve on our board of directors, including prior knowledge of the company and experience as a director of other private and public technology companies.
Opinion: We all know the story of overspending and the excess the command economy brings. That doesn’t change the calculus that solar is on its way to being the cleanest, most efficient, and most affordable source of electricity.
Name: Brenda J Bacon
Position: Director
Transaction Date: 2024-03-04 Shares Bought: 5,425 Average Price Paid: $46.07 Cost: $249,945
Company: Hilton Grand Vacations Inc. (HGV)
Hilton Grand Vacations Inc. is a global timeshare firm that designs, markets, sells, manages, and operates timeshare resorts, timeshare plans, and related reservation services, principally under the Hilton Grand Vacations name. HGV became an independent publicly traded business on January 3, 2017, after Hilton Worldwide Holdings Inc.’s tax-free spin-off of both HGV and Park Hotels & Resorts Inc. Following the spin-off, HGV became an independent publicly traded corporation, with common stock trading on the New York Stock Exchange under the symbol “HGV.” Their primary operations include selling vacation ownership intervals and vacation ownership interests for us and third parties, financing and servicing loans offered to consumers for VOI purchases, running resorts and timeshare plans, and administering clubs and exchange programs. As of December 31, 2023, The company has approximately 150 properties across the United States, Europe, Mexico, the Caribbean, Canada, and Asia.
Brenda J. Bacon is the President and CEO of Brandywine Senior Care LLC, a growing platform of 32 luxury senior care homes in seven states. Ms. Bacon co-founded Brandywine Senior Living in 1996. She formerly worked as the Chief of Management and Planning for New Jersey Governor James Florio’s administration. From 1989 to 1993, Ms. Bacon was the Chief of Management and Planning, a cabinet-level job under New Jersey Governor James J. Florio. Ms. Bacon now serves on the board of FTI Consulting. She also serves on the boards of Argentum and Rowan University. Ms. Bacon received the Virtua Health Humanitarian Award for the year 2017. Ms. Bacon will be recognized in the American Seniors Housing Association Hall of Fame in 2022. Ms. Bacon earned her undergraduate degree from Hampton University and her Master of Business Administration from The Wharton School at the University of Pennsylvania.
Opinion:
Name: Robert M Blue
Position: Chair, President and CEO
Transaction Date: 2024-03-04 Shares Bought: 21,735 Average Price Paid: $45.91 Cost: $997,891
Company: Dominion Energy Inc (D)
Dominion Energy, based in Richmond, Virginia, and founded in Virginia in 1983, is one of the country’s leading energy producers and distributors. Dominion Energy is committed to providing consistent, cheap, and progressively clean energy daily, as well as attaining net zero carbon emissions by 2050. Dominion Energy aims to be a major provider of electricity, natural gas, and related services to customers, especially in the eastern United States. As of December 31, 2023, Dominion Energy’s portfolio of assets included approximately 29.5 GW of electric generating capacity, 10,600 miles of electric transmission lines, 79,300 miles of electric distribution lines, and 94,800 miles of gas distribution mains and related service facilities, all supported by 4,000 miles of gas transmission, gathering, and storage pipeline. As of December 31, 2023, Dominion Energy operates in 15 states and serves nearly 7 million people. Such amounts include Dominion Energy’s gas distribution operations, which are slated to be sold to Enbridge by 2024.
Robert M. Blue is the president and CEO of Dominion Energy. Blue was Dominion Energy’s executive vice president and co-chief operational officer until taking over as CEO in 2020. He also served as president of Dominion Energy Virginia, the company’s electric provider in Virginia and North Carolina. Blue joined Dominion Energy in 2005 and has held many positions, including vice president of state and federal affairs, senior vice president of public policy and corporate communications, senior vice president of regulatory, law, energy solutions, and policy, and president of Dominion Virginia Power. Blue serves on the University of Virginia Board of Visitors as well as the Board of Directors of Communities in Schools of Virginia. Blue graduated from the University of Virginia and Yale Law School. He also received his MBA from the University of Virginia’s Darden School of Business.
Opinion:
Name: David A Lorber
Position: Chairman And Ceo / 10% Owner
Transaction Date: 2024-03-01 Shares Bought: 19,494 Average Price Paid: $45.08 Cost: $878,788
Company: PhenixFIN Corp (PFX)
PhenixFIN Corporation is a Delaware-incorporated internally managed non-diversified closed-end management investment company that has chosen to be regulated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has developed and intends to continue to form some taxable subsidiaries that are taxed as corporations under federal income tax laws. These Taxable Subsidiaries allow them to hold equity securities of portfolio companies organized as pass-through corporations while still meeting the Code’s requirements for RIC status. The Company’s investment purpose is to provide both current income and capital appreciation. The management team intends to achieve this goal primarily by making loans, private equity, and other investments in privately held businesses. The company believes the private loan market is undergoing structural changes that will provide considerable opportunities for non-bank lenders and investors.
Mr. Lorber is the Chairman and CEO of PhenixFIN Corporation. Mr. Lorber co-founded FrontFour Capital Group LLC, an investment adviser, and has been a Portfolio Manager since January 2007. He is also a Co-Founder of FrontFour Capital Corp., an investment firm, and has served as a Principal since January 2011. Mr. Lorber previously worked as a Senior Investment Analyst for Pirate Capital LLC, a hedge fund, from 2003 until 2006. From 2001 to 2003, he worked as an Analyst at Vantis Capital Management LLC, a money management and hedge fund, and 2000 to 2001 as an Associate at Cushman & Wakefield, Inc., a worldwide real estate company. He is also the Lead Director, Chairman of the Governance & Nomination Committee, and a member of the Compensation Committee. From April 2006 till December 2014, Mr. He was also a director of Fisher Communications Inc., an integrated media corporation, from April 2009 until March 2012. Mr. Lorber received his BS from Skidmore College.
Opinion: Private loans are all the rage with family offices. I don’t see why when there are public vehicles with paid management doing the same thing.
Name: Richard E Muncrief
Position: President and CEO
Transaction Date: 2024-03-04 Shares Bought: 15,000 Average Price Paid: $44.42 Cost: $666,300
Company: Devon Energy Corp (DVN)
Devon is an independent energy company that explores, develops, and produces oil, natural gas, and natural gas liquids. The company’s operations are based in many onshore areas throughout the United States. Devon and WPX completed an all-stock merger of equals on January 7, 2021. WPX was a company that explored and produced oil and gas in the Delaware Basins of Texas and New Mexico, as well as the Williston Basin of North Dakota. The company’s business purpose is to create consistently competitive shareholder returns within its peer group. Because exploring for, developing, and producing oil and natural gas requires significant capital, the company’s success depends on achieving long-term, capital-efficient cash flow growth. The company’s business strategy is centered on providing a consistently competitive shareholder return among its peers. Because the industry of finding, developing, and producing oil and natural gas is capital-intensive, generating long-term, capital-efficient cash flow growth is essential to success.
Richard E. Muncrief was appointed to the board of directors and elected president and CEO of the firm in January 2021, following Devon’s merger with WPX. Muncrief was previously the CEO and Chairman of the Board of WPX. He joined WPX’s board of directors in 2014. Before joining WPX, he was the senior vice president of operations and resource development at Continental Resources, Inc. Muncrief formerly worked at Resource Production Company as the corporate business manager from August 2008 until May 2009. Muncrief earned a bachelor’s degree in petroleum engineering technology from Oklahoma State University, where he was also named a notable alumnus and a member of the College of Engineering, Architecture, and Technology Hall of Fame. He is presently a member of Williams Companies’ board of directors, where he serves on the remuneration and management development committee, as well as the environmental, health, and safety committee.
Opinion: This is a table-thumping buy, but you need to have patience. Devon is an extremely well-run $30 billion market cap oil and gas company producing 662 million barrels of oil equivalent in the U.S. and Canada. The fallacy of thinking that EVs are going to imminently displace autos, as well as industrial policy hostile to fossil fuels, has created pressure on stock prices in the energy sector. It’s always good to see the CEO backing up his talking with buying the company’s stock.
Name: Matthew J Jansen
Position: COO North America
Transaction Date: 2024-03-04 Shares Bought: 6,000 Average Price Paid: $42.76 Cost: $256,560
Company: Darling Ingredients Inc. (DAR)
Darling Ingredients Inc. was established in 1882 by Swift meat packing companies and the Darling family. It was founded in Delaware in 1962 under the name “Darling-Delaware Company, Inc.” Darling changed its name from “Darling-Delaware Company, Inc.” to “Darling International Inc.” on December 28, 1993, and then again to “Darling Ingredients Inc.” on May 6, 2014. They are a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, providing a diverse range of ingredients as well as tailored specialty solutions to customers in the pharmaceutical, food, pet food, animal feed, industrial, fuel, bioenergy, and fertilizer sectors. In fiscal 2022 and fiscal 2023, the Company acquired many businesses, including two major rendering operations, Valley Proteins in North America and the FASA Group in South America, as well as a big collagen business, Gelnex, which processes in both South and North America.
Matt Jansen has been the Chief Operating Officer – North America since May 2023. Matt joined Darling Ingredients from StepStone Group Inc., where he was Senior Managing Director, and brings over 30 years of executive management expertise in the global agri/food business. He has also served as CEO of Saudi Arabia Agriculture and Livestock Investment Company and COFCO International, COFCO Corporation’s global agriculture business platform. Matt also held several leadership positions at ADM, including Chief Risk Officer and Senior Vice President; President of ADM Global Oilseeds; President of ADM Grain Group; and President of ADM Brazil.
Opinion: Not a large buy but I’m watching it. The stock has underperformed. Jansen is relatively new here but maybe he sees some progress. DAR had a bad Q4 earnings on February 27th after the close. They missed- reporting $.52 when the consensus expectation was $.66. Oddly enough, the stock didn’t tank and is slightly higher in price than the day it was reported. That’s a strong technical signal that sellers are exhausted. A new chief operating officer might be getting his hands around the moving parts. I’m paying attention to this one.
Name: Michael E Pegram
Position: Director
Transaction Date: 2024-03-06 Shares Bought: 15,000 Average Price Paid: $41.45 Cost: $621,750
Company: Caesars Entertainment Inc. (CZR)
Caesars Entertainment Inc. was founded in 1973 by the Carano family, who opened the Eldorado Hotel Casino in Reno, Nevada. Beginning in 2005, the company expanded through acquisitions, including Tropicana Entertainment, Inc. in 2018, Isle of Capri Casinos, Inc. in 2017, and MTR Gaming Group, Inc. in 2014. The acquisition of William Hill PLC was closed on April 22, 2021. Casino gaming operations, retail and online sports betting, and internet gaming generate the majority of revenue. To attract people, the firm uses hotels, restaurants, bars, entertainment, horse racing, retail outlets, and other activities. The company consolidated business consists of complementary businesses that reinforce, cross-promote, and build on one another: casino, which includes retail and online sports betting and iGaming, food and beverage, hotel, casino management services, entertainment, retail, and other business operations.
Michael E. Pegram served on the Board of Directors of Eldorado Resorts, Inc. from September 2014 to July 2020, when he was named to Caesars Entertainment Inc.’s Board of Directors by the terms of the merger agreement with Eldorado Resorts. Mr. Pegram is currently a director of, and the former Chairman of, the Thoroughbred Owners of California, and has been the owner of several racehorses, including the 1998 Kentucky Derby and Preakness Stakes winner, Real Quiet, the 2010 Preakness Stakes winner, Lookin at Lucky, the 1998 Breeders’ Cup Juvenile Fillies winner and 1999 Kentucky Oaks winner, Silverbulletday, the 2001 Dubai World Cup winner, Captain Steve, and the 2007 and 2008 Breeders’ Cup Sprint winner, Midnight L. Mr. Pegram was chosen to serve as a director due to his considerable experience in the horse racing sector, as well as as an investor, business owner, and director of several casino businesses.
Opinion: At first blush, I’m all in on this one. There may be near-term headwinds, but with the transfer of wealth from boomers to millennials underway, smooth long-term winds to the back should help CZ gaming and vacation experiences. It’s the future we don’t know, and I have to believe it’s promising for the younger generation flush with their parents’ cash on top of their increasing workplace earnings.
Name: James Lawrence Dolan
Position: Executive Chairman / CEO
Transaction Date: 2024-02-28 Shares Bought: 76,139 Average Price Paid: $40.73 Cost: $3,100,935
Company: Sphere Entertainment Co. (SPHR)
Name: Kristin A Dolan
Position: Director & CEO
Transaction Date: 2024-02-28 Shares Bought: 76,139 Average Price Paid: $40.73 Cost: $3,100,935
Company: Sphere Entertainment Co. (SPHR)
Sphere Entertainment Co., formerly Madison Square Garden Entertainment Corp. and MSG Entertainment Spinco, Inc., is a Delaware corporation situated in Two Pennsylvania Plaza, NY 10121. A direct, wholly-owned subsidiary of Madison Square Garden Sports Corp., originally The Madison Square Garden Company, the Company was created on November 21, 2019. A leading live entertainment and media corporation, Sphere Entertainment Co. has two reportable business segments: Sphere and MSG Networks. Sphere is a next-generation entertainment medium, and MSG Networks has two regional sports and entertainment networks and a DTC streaming service. The company believes Sphere, a next-generation entertainment medium powered by cutting-edge technologies, will enable huge multi-sensory storytelling. MSG Networks and MSG+: This section covers the Company’s regional sports and entertainment networks and direct-to-consumer streaming service. New York DMA is served by MSG Networks.
Mr. Dolan has served as a director, Executive Chairman, and Chief Executive Officer of the firm since November 2019. Mr. Dolan has also served as a director, Executive Chairman, and CEO of Madison Square Garden Entertainment Corp. since December 2022, and as a director and Executive Chairman of Madison Square Garden Sports Corp. since 2015. Mr. Dolan has been Non-Executive Chairman of AMC Networks Inc. since February 2023, having previously held the position from September 2020 to December 2022. He’s also been a director since 2011. He was President of Cablevision from 1998 to 2014, and Chief Executive Officer of Rainbow Media Holdings, Inc., a former programming unit of Cablevision that was spun off in 2011 to become AMC Networks, from 1992 to 1995. He also worked as Vice President of Cablevision from 1987 to 1992. In addition, Mr. Dolan served as a Cablevision director from 1991 to 2016.
Kristin A. Dolan has been a Director of the Company since April 2020. She has been CEO of AMC Networks Inc. since February 2023. Previously, she founded 605, LLC, an audience measurement and data analytics organization in the media and entertainment industries, where she served as CEO from 2016 to February 2023 and Non-Executive Chairman until September 2023. Ms. Dolan formerly worked at Cablevision as President of Optimum Services (2013-2014), Senior Executive Vice President of Product Management and Marketing (2011-2013), and Senior Vice President (2003-2011). Ms. Dolan has been a Wendy’s Company director since 2017, joining the boards of Revlon, Inc. from 2017 to May 2023, AMC Networks from 2011 to March 2023, Madison Square Garden Sports Corp. from 2015 to 2021, MSG Networks Inc. from 2010 to 2015 and again from 2018 until the Company merged in July 2021, and Cablevision from 2010 to 2016.
Opinion: We’ve all heard of the Sphere. Man, I wish I had gone there. The stock, that is not the sensation pounding experience rock event. The stock is up 25% since billionaire owner Nolan Duos purchased $6 million of stock. Be prepared to move fast on sentiment in this game. Thinking comes later.
Name: Thomas A Amato
Position: President and CEO
Transaction Date: 2024-03-01 Shares Bought: 10,000 Average Price Paid: $23.62 Cost: $236,241
Company: Trimas Corp (TRS)
TriMas Packaging, TriMas Aerospace, and Specialty Products groups create, develop, and manufacture a wide range of products primarily for the consumer, aerospace and defense, and industrial industries. The company believe that the businesses have important and distinguishing characteristics, such as well-known brand names in the markets they serve, innovative product technologies and features, customer-approved processes and qualified products, strong cash flow generation, long-term growth opportunities, and a commitment to sustainability. TriMas, based in Bloomfield Hills, Michigan, employs over 3,400 people who serve customers from 38 production and support locations throughout 13 countries. The company TriMas family of businesses has strong brand names in the sectors they serve and adheres to a common set of principles and strategic aims as outlined in the TriMas Business Model.
Mr. Amato is the President and Chief Executive Officer of TriMas Corporation. He joined TriMas as president and CEO in 2016 and has over 25 years of diverse industrial expertise, including many senior positions at global, multibillion-dollar companies. He also acts as a director for the company. Mr. Amato’s previous positions include Manager-Business Development at Masco Corp., President & CEO of Oldco M Corp., President & CEO of Metaldyne Co. LLC, Director at Asahi Tec Corp., Co-President & Chief Integration Officer at Metaldyne Performance Group, Inc., Principal & Engineer-Applications Development at Imperial Chemical Industries Ltd., and Director-Corporate Development at MascoTech, Inc. Mr. Amato earned an undergraduate degree from Wayne State University and an MBA from the University of Michigan.
Opinion: Aerospace has been a tough place to make a living, and with Boeing’s never-ending drama and the increasing Federal regulatory burden, it doesn’t seem to be improving anytime soon.
Name: Richard F Wallman
Position: Director
Transaction Date: 2024-03-06 Shares Bought: 50,000 Average Price Paid: $19.78 Cost: $989,195
Company: Ceco Environmental Corp (CECO)
CECO Environmental Corp. was created in 1966 and is presently headquartered in Dallas, TX. The company is a leading environmentally focused, diversified industrial corporation that serves the global industrial air, industrial water, and energy transition sectors with innovative technology and application knowledge. The company helps businesses flourish by providing safe, clean, and efficient solutions that protect people, the environment, and industrial equipment. The company’s solutions improve air and water quality, optimize emissions management, and increase energy and process efficiency for highly engineered applications in power generation, midstream and downstream hydrocarbon processing and transportation, chemical processing, electric vehicle production, polysilicon fabrication, semiconductor and electronics production, battery production and recycling, specialty metals, aluminum, and steel production, beverage can manufacturing.
Mr. Wallman has been on the board since November 2021. Mr. Wallman also serves on the boards of directors for Smile Direct Club, Charles River Laboratories International, Inc., and Roper Technologies, Inc., all of which are publicly traded in the United States. Mr. Wallman was Senior Vice President and Chief Financial Officer of Honeywell International, Inc. and AlliedSignal, Inc., both of which are diversified technology companies, from 1995 until his retirement in 2003. Mr. Wallman has previously served on the boards of directors of Convergys Corporation, Extended Stay America, Inc., and Wright Medical, Inc., all of which are publicly traded in the United States, as well as Boart Longyear, which is publicly traded in Australia. Mr. Wallman holds a Bachelor of Engineering degree from Vanderbilt University and an MBA from the University of Chicago Booth School of Business.
Opinion: Buying near an all-time high in price is unusual for value conscious insiders. It represents business is good, and it’s getting better. Mr. Wallman is a steady buyer since August 2022 when he purchased 20,000 shares for $8.97. Its hard to say if he knows something Mr. Market doesn’t yet know.
Name: Sara Grootwassink Lewis
Position: Director
Transaction Date: 2024-03-04 Shares Bought: 18,000 Averag12,000e Price Paid: $16.71 Cost: $300,780
Company: Healthpeak Properties Inc. (DOC)
Healthpeak Properties, Inc. is a real estate investment trust that acquires, develops, owns, and manages healthcare real estate. It operates in the following business segments: Laboratory, outpatient medical, and continuing care retirement community (CCRC). The Lab section consists mostly of laboratory and office space for biotechnology, medical device, and pharmaceutical firms, scientific research institutions, government agencies, and other life science industry groups. Medical office buildings and hospitals fall within the Outpatient Medical sector. The CCRC sector consists of independent living, assisted living, and skilled nursing facilities that provide a continuum of care on a site. The company was created on March 21, 1985, and is based in Denver, Colorado.
Sara Grootwassink Lewis founded and was the CEO of Lewis Corporate Advisors, a board and capital markets consultancy firm, from 2009 to 2018. She formerly worked for Elme Communities as Executive Vice President and Chief Financial Officer (2002-2009) and Managing Director, Finance and Capital Markets (2001-2002). Ms. Grootwassink Lewis previously worked as Vice President of Finance and Investor Relations at Corporate Office Properties Trust from 1999 to 2001. She has been on the boards of Weyerhaeuser Company since 2016 and Freeport-McMoRan Inc. since 2021. Ms. Grootwassink Lewis formerly served on the board of Sun Life Financial, Inc., from 2014 to 2021. She is a Board Leadership Fellow of the National Association of Corporate Directors, a trustee of The Brookings Institution, and a member of the Leadership Board and Governance Working Group of the US Chamber of Commerce Centre for Capital Markets Competitiveness. She is a CPA and a chartered financial analyst.
Opinion: We own this one, and it was heartening to see some insider buying in this medical REIT paying 6.76%
Name: Charles C Townsend
Position: Director
Transaction Date: 2024-02-29 Shares Bought: 289,654 Average Price Paid: $8.32 Cost: $2,410,844
Company: Gogo Inc. (GOGO)
Name: Harris N Williams
Position: Director
Transaction Date: 2024-02-29 Shares Bought: 12,000 Average Price Paid: $8.10 Cost: $97,200
Company: Gogo Inc. (GOGO)
Gogo is the world’s leading provider of broadband connectivity services to the business aviation industry. The company has been in this market for almost 25 years. Their objective is to improve passengers’ lives and operators’ productivity by providing the world’s best business aviation in-flight connectivity and customer service. They have always endeavored to deliver the greatest connectivity for the business aviation sector, regardless of technology, and they have a proven track record of doing so. Gogo began with analog air-to-ground technology in the late 1990s, then transitioned to narrowband satellite connectivity in the early 2000s as analog cellular backhaul became obsolete, and then returned to ATG with the digital broadband 3G and 4G networks in 2010. The company anticipates to commercialize their fourth ATG network, Gogo 5G, in the fourth quarter of 2024. While developing Gogo 5G, they are working with a subset of AVANCE clients and customers that use their existing Gogo Biz ATG aerial technology on their terrestrial 3G and 4G networks to convert to an LTE-compatible AVANCE system.
Charles C. Townsend has been a member of the board of directors since January 2010. Mr. Townsend is currently the Managing General Partner at Bluewater Wireless II, L.P. Mr. Townsend created Aloha Partners LP in 2001 and served as Managing General Partner until 2008. Mr. Townsend previously worked as the Managing General Partner of Aloha Partners II from 2006 to 2014. From 1988 to 1998, Mr. Townsend was the Atlantic Cellular Company’s President and CEO. Mr. Townsend has also held the position of President of Pac 3, LLC since January 2004. Mr. Townsend earned a B.A. in Social Psychology from the University of Virginia and an M.B.A. from Harvard Business School.
Harris N. Williams has been on the Board of Directors since March 2010. Mr. Williams is currently the Senior Managing Director at WF Investment Management LLC, a diversified asset management firm. Mr. Williams worked at Ripplewood Holdings, LLC, a worldwide private equity firm that specializes in control investments, from 2005 to 2013, and has been the Managing Director since 2007. Prior to 2005, Mr. Williams worked at Credit Suisse’s Investment Banking division, where he was largely responsible for mergers and acquisitions and leveraged buyouts. On a global scale, Mr. Williams has focused on technology, media, financial services, healthcare, industrials, and hospitality. Mr. Williams sat on the board of directors of 3W Power Holdings Ltd. from 2011 to 2013, where he also chaired the Audit Committee. Mr. Williams graduated from Boston University with a B.S. in Business Administration and earned an M.B.A. from the University of Pennsylvania’s Wharton School.
Opinion: These are sizeable purchases. Will SpaceX’s Starlink satellite broadband subsidiary buy out Gogo or just run them out of business? I asked a chatbot this question. Here is a link that, if you’re interested, I’d look at – Could Gogo face Starlink in the business aviation market?
Name: Brian W Kocher
Position: CEO
Transaction Date: 2024-03-04 Shares Bought: 36,000 Average Price Paid: $6.75 Cost: $243,126
Transaction Date: 2024-03-05 Shares Bought: 38,000 Average Price Paid: $6.65 Cost: $252,757
Company: SunOpta Inc. (STKL)
SunOpta Inc. was incorporated under Canadian legislation in 1973. The company manufactures top natural and private label brands, as well as their proprietary brands including SOWN®, Dream®, and West Life™. The product portfolio is built around a variety of plant-based beverages, such as oat, almond, soy, coconut, and rice milk and creamers, which have a reduced carbon footprint and use less water than standard dairy milk. The consumer product line now includes protein drinks, teas, broths, and fruit snacks. In October 2023, they concluded the sale of their commodity-based frozen fruit company to focus on value-added goods in the plant-based and healthy snack categories. The company distributes its products through a variety of distribution channels, including private label items to retail consumers, branded products under co-manufacturing agreements with other branded food companies for distribution, and its own branded products to retail and food service clients. In addition, the company makes liquid and dry ingredients for internal use and sale to other food and beverage businesses.
Brian W. Kocher is a businessman who has led seven different companies and is currently the CEO and Director of SunOpta, Inc., President and CEO of Castellini Co. LLC, Chief Operating Officer of Castellini Group, Inc., Chairman of AgroFresh Solutions, Inc., and President of RWI Transportation LLC. He has previously served as Chairman of the United Fresh Produce Association, President, Chief Executive Officer, and Director of Calavo Growers, Inc., Vice President-Finance & Administration of CONXUS Communications, Inc., Chief Executive Officer of Chiquita Brands International, Inc., Vice President-Sales & Services of Hill-Rom, Inc., Globaler Kostenprüfer at Wells Fargo Vendor Financial Services LLC, Auditor at Pricewaterhouse LLP, and Vice President & Global Controller at GE Capital. He obtained his undergraduate degree from The Ohio University.
Opinion: SunOpta needs a hot brand. They don’t have one.
Name: Glenn Kelman
Position: Chief Executive Officer
Transaction Date: 2024-03-06 Shares Bought: 30,500 Average Price Paid: $6.41 Cost: $195,593
Company: Redfin Corp (RDFN)
Redfin Corporation is a residential real estate brokerage firm based in the United States and Canada. The company runs an online real estate marketplace and offers real estate services, such as assisting people in purchasing or selling a home. It also offers title and settlement services, as well as mortgage origination and sale. In addition, the company connects customers with rental homes via internet platforms. The company was formerly known as Appliance Computing Inc. until changing its name to Redfin Corporation in May 2006. Redfin Corporation, founded in 2002, is headquartered in Seattle, Washington.
Glenn has served as one of the directors since March 2006. Since September 2005, Mr. Kelman has served as the Chief Executive Officer. Before joining Redfin, he co-founded Plumtree Software, a Sequoia-backed publicly traded firm that pioneered the business portal software market. Glenn led engineering, marketing, product management, and business development at various points during his seven-year tenure at Plumtree; in the early days, he was also in charge of financing and general operations. Glenn was one of the first workers at Stanford Technology Group, a Sequoia-backed startup bought by IBM, before founding Plumtree. Glenn grew up in Seattle and graduated from the University of California, Berkeley. He often contributes to the Redfin blog and Twitter.
Opinion: Hope springs eternal.
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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 who has any experience at in the stock market 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 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, with selling, we analyze unusual patterns, 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, Icahn, 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. Of course we are now using the popular chatbots like Microsoft Copilot, Open Ai, Bard, Perplexity and more. So if our prompt engineering elicits some hallucinations, you’re on your own here as well.
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. The websites and marketing material are just that, poorly disguised marketing material for many. I should know that better than most if you at my past involvement in building the 1st websites for many Fortune 500 companies.
No one tracks and understands insider behavior better than us. We’ve been doing it religiously since 2001 when I quit being an insider myself and devoted myself full-time to managing my personal investments. Needless to say, past good fortune is no guarantee of future success. We may own positions, long or short, in any of these names and are under no obligation to disclose that.
This blog is solely for educational purposes and the author’s own amusement. Don’t rely on this blog. Think of the blog as part of my personal investment journal that I am willing to share with the DIY investor. We welcome your comments on our analysis, but please do your own research. Investing with 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,
