Notable buys

Normally market routs like we just experienced are accompanied by a step up in insider buying. Earning season is in full swing now so most insiders are blacked out until after their companies report quarterly numbers. If the market remains lower, we will see what managers, employees, and directors think about the “buying opportunity”?

Notable Sells

Most of the sales last week were planned sales or secondaries so its not easy to read too much into them. One of them stands out though.

SFIX Stich Fix gets shredded. Personalized online apparel company has been a market darling for most of 2018. But, the Cinderella run in SFIX stock hit a major speed-bump recently after the company reported middle-of-the-road fourth quarter numbers. Those numbers — while good — weren’t good enough to justify the stock’s massive year-to-date rally.As a result, SFIX stock dropped more than 35% in a single day. Now, SFIX stock trades nearly 50% off recent highs.

You might think that would attract some buyers as analysts rushed to defend the Company amongst a rash of class action shareholder lawsuits.  This didn’t deter prominent venture capital company, Benchmark Capital from reducing their holdings from selling 329,621 shares at $26.48 per share


In this report, we examined open market purchases from employees  and directors ending the week of October 5 2018. Insiders sell stock for many reasons, but they generally buy for just one – to make money.  As a standard, we only look at material amounts of money, $200 thousand or more, as anything less could just be window dressing.  The bar is different with selling, because the natural state of management is to be sellers. This is because most companies provide significant amounts of management compensation packages as stock. Therefore, with selling, we analyze for unusual patterns, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52 week lows.Another red flag are large planned sale programs that start without warning. We generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and not the SMART money we are trying to go to school on.  Although this info is available for free from the SEC’s Web site , Edgar, we subscribe to the Washington Service as they provide a way to manage and make sense of the vast realms of data.
To learn more about our strategy, visit our website here. We welcome your comments on our analysis. We may own positions, long or short, in any of these names and are under no obligation to disclose that.