As I wrote last week, nothing fazes this market’s relentless path higher—not higher rates, not even a sharp jump in oil prices. An Israeli retribution strike against Iranian oil facilities hangs like the sword of Damocles, ready to decapitate the entire bull run. Even a moderate oil price lift helped the beleaguered oil and gas patch, providing more fuel for the fire.
The market hasn’t priced in a full-scale Israeli-Iranian war, with Israel taking out significant Iranian oil assets. Please don’t believe the Israelis are dependent on world opinion or that they are waiting for Joe Biden, their puppet master. It’s in the DNA of every Jew that no one has their back, and if they don’t stick up for themselves, they could wind up, well, you know, the rest. I do think the Israelis will cut off the head of the snake. They have to go for the money. Any intelligent war gaming analysis leads you to that conclusion. Cutting off the oil money means cutting off the supply of arms and funds to the Iranian-sponsored terror groups, Hamas, Hezbollah, Houdis, ISIS, and whatever evil collusion of maniacal brainwashed Islamic groups. Besides, it’s the proper thing to do to stop the slaughter of innocent noncombatants because these” freedom fighters and religious zealots wage war behind innocent human shields and captive populations.
The potential for a significant jump in the price of oil makes this week’s notable Southwest Airlines insider buy even more audacious since airline stocks’ knee-jerk reaction to a super spike in jet fuel prices will be sharply lower.
Name: Rakesh Gangwal
Position: Director
Transaction Date: 2023-10-01 Shares Bought: 643,788 Average Price Paid: $29.98 Cost: $19,300,400
Transaction Date: 2023-10-01 Shares Bought: 530,918 Average Price Paid: $29.89 Cost: $15,866,908
Transaction Date: 2023-09-30 Shares Bought: 705,904 Average Price Paid: $29.65 Cost: $20,928,724
Transaction Date: 2023-10-01 Shares Bought: 127,195 Average Price Paid: $29.49 Cost: $3,750,908
Transaction Date: 2023-09-30 Shares Bought: 1,184,898 Average Price Paid: $29.47 Cost: $34,919,943
Transaction Date: 2023-09-30 Shares Bought: 241,744 Average Price Paid: $29.39 Cost: $7,105,877
Transaction Date: 2023-10-01 Shares Bought: 165,553 Average Price Paid: $29.15 Cost: $4,826,003
Company: Southwest Airlines Co (LUV)
Name: Gary C Kelly
Position: Executive Chairman
Transaction Date: 2023-09-30 Shares Bought: 33,921 Average Price Paid: $29.52 Cost: $1,001,348
Company: Southwest Airlines Co (LUV)
Southwest Airlines Co. was established in 1967 and is based in Dallas, Texas. Southwest Airlines Co. is a passenger airline that operates scheduled flights throughout the United States and nearby international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft, serving 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries such as Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also offers in-flight entertainment and internet options on Wi-Fi-enabled planes, as well as a loyalty program called Rapid Rewards, which allows users to earn points for spending money on Southwest base prices. In addition, the company provides a suite of digital tools to help customers with their travel needs, such as websites and applications, as well as SWABIZ, an online booking tool.
Rakesh Gangwal was appointed to the Southwest Airlines Co. Board of Directors on July 7. Mr. Gangwal serves on the board of InterGlobe Aviation Ltd. Mr. Gangwal previously held the positions of Chief Executive Officer of Grand Circle Corp., Executive Vice President-Planning & Development at Air France USA, Non-Executive Chairman of OfficeMax, Inc., Chairman, President & CEO of Worldspan LP, Chairman, President & CEO of Worldspan Technologies, Inc., President & CEO of US Airways Group, Inc., President & CEO of US Airways, Inc., and Seni. Mr. Gangwal holds an undergraduate degree from the Indian Institute of Technology Kanpur and an MBA from The Wharton School at the University of Pennsylvania.
Gary C. Kelly became Chairman and CEO of Southwest Airlines Co. on April 4, 2008. During Kelly’s tenure, Southwest grew to become the nation’s largest airline in terms of originating domestic passenger traffic. Kelly began his career with Southwest Airlines as a controller, progressing to chief financial officer and vice president of finance, then executive vice president and CFO, before being named CEO and vice chairman in July 2004. In 2008, Kelly was appointed chairman and president. In February 2022, he retired as CEO of Southwest Airlines and assumed the role of executive chairman. Before joining Southwest Airlines in 1986, Kelly worked as a CPA for Arthur Young & Company in Dallas and as a Controller for Systems Center, Inc. Kelly earned a B.B.A. in accounting from the University of Texas in Austin.
Opinion: I will follow this $100 million plus insider buy, but I’m waiting for the super spike in oil that crushes the airlines. Then we’ll be all in, even though airlines are notoriously tricky to play. The news cycle has been so bad for Southwest that it has to be the contrarian buy. With terrorism likely to rise because of the latest conflict in the Mideast, all domestic carriers like Southwest should be strong beneficiaries as long as the rise in oil doesn’t cause a recession.
Name: David J Matlin
Position: Director
Transaction Date: 2023-09-30 Shares Bought: 92,307 Average Price Paid: $4.75 Cost: $438,458
Company: Clene Inc. (CLNN)
Clene Inc., a clinical-stage pharmaceutical firm, is dedicated to the discovery, development, and commercialization of innovative clean-surfaced nanotechnology therapies. Its lead drug candidate is CNM-Au8, which is being studied in various clinical trials, including a completed Phase 2 platform trial to evaluate the safety and efficacy of CNM-Au8 in patients with amyotrophic lateral sclerosis; completed Phase 2 proof of concept clinical trial in patients with early symptomatic ALS; completed two open-label investigator blinded Phase 2 clinical trials on the brain’s energy metabolites; and completed Phase 2 clinical trial for the treatment. The company is also working on CNM-AgZn17, a gel polymer suspension of silver and zinc ions for the treatment of infectious diseases and wound healing, as well as CNM-ZnAg, a broad-spectrum antiviral and antibacterial agent for infection disease and immune support for symptom resolution. Furthermore, it develops and distributes dietary supplements such as rMetx, an aqueous zinc-silver ion dietary supplement, and KHC46, an aqueous gold dietary supplement with very low concentrations of Au nanoparticles. The corporation is headquartered in Salt Lake City, Utah.
David Matlin has been on the board of directors since December 2020 and has been chairman since May 2021. He is responsible for supervising and giving independent judgment to the Board, as well as overall strategic and business planning. Mr. Matlin was the CEO of MatlinPatterson Global Advisers LLC, a global private equity business he co-founded in 2002, and a co-founder of MatlinPatterson Asset Management, a series of U.S.-based credit hedge funds launched in 2010. Mr. Matlin was a former Managing Director at Credit Suisse First Boston and a founding partner of Merrion Group, LP. He presently sits on the public board of TriSalus Life Sciences Inc. (NASDAQ: TLSI), as well as the boards of other privately held businesses. Mr. Matlin received his J.D. from the University of California, Los Angeles Law School, and his B.S. in economics from the University of Pennsylvania’s Wharton School.
Opinion: Lawyer turned biotech investor doesn’t stir my animal spirits.
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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,
