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 recent market correction’s “buying opportunity”?

CCI Crown Castle International Corp Two insiders purchased $676.2k of stock at prices from $105.99 to $106.  At its current price, this cellular tower REIT has a dividend yield of 4.35%. Business will remain good as the roll out of 5G is expected to require many more cell tower rentals. The 4.35% dividend yield is a little misery for our taste but would be a buyer below $100 as the revenue growth potential is solid.


BLK BlackRock Inc. Shareholders of BlackRock have had a tough time this year. The company reported 3rd quarter earnings  of $7.52 on 10-16-28 easily topping analyst estimates of $6.86 but did little to reassure investors as the stock made a 52 week low several days in October.None the less it didn’t deter director William Ford from averaging down on his money losing investment.  Ford picked up another 4000 shares of the worlds largest money manager at an average price of $402.40. Ford’s previous purchase of 1000 shares on 5-19-18 at $530.96 and 1000 shares on 8-12-18 at $467.92 must be disappointing.

 Goldman Sachs analyst Alexander Blostein removed BlackRock from his firm’s America’s Conviction List but keeps a Buy rating on the name with a $475 12-month price target. The analyst continues to view BlackRock as a “structural winner” with “significant runway” in exchange traded funds and “best-in-class” diversification across products and geographies. However, following yesterday’s Q3 results, Blostein believes near-term organic fee growth dynamics and continued fee rate headwinds are likely to pressure BlackRock’s revenue outlook and likely keep operating income growth below 10% through 2020.

ASGN ASGN Inc. Director Sheridan bought 20,000 shares on 10-26-18 at an average price of $65.33. BOFA/Merrill Lynch analyst Gary Bisbee reinstated coverage of ASGN with a buy and $84 price target saying its is a best idea in the Business and Information Services sector. The analyst said the pullback in shares provide and opportunity to buy this leading staffer with its US and IT focus. Bisbee said ASGN’s quality assets and focus in the fastest areas of staffing will drive earnings growth and re-rate shares higher.  Wells Fargo analyst Edward Caso lowered is price target to $82 from $96 entirely due to the recent market multiple correction.  The analyst notes that the Company reported very strong quarterly results.

IBTX Independent Bank Group recent plunge in share value was noticed by 5 insiders who purchased  $1.1 million of stock at prices ranging from $53.89 to $55.71. IBTX is one of several regional banks that have seen stepped up insider banking as the sector was hit hard on prospects that the economy is slowing and the Fed’s ratcheting up of interest rates might be closer to the end than previously thought.

BOCH Bank of Commerce Holdings  saw 5 insiders purchase $1.1 million at prices from $11.43 to $11.54.

PMBC Pacific Mercantile Bancorp insiders picked up $273 k worth of stock, the largest buy by CFO Christianssen of 30,500 shares at an average price of $8.25. PMBC is down 20% from its September high of $10.20.

AZZ AZZ Inc CEO Ferguson bought 5000 shares at $45.77.  AZZ reported on 10-9-18 earnings of $.43 versus analyst expectations of $.47. They raised FY19 revenue and earnings estimates.  This has done little to reassure shareholders as the stock is down 15% in the last 20 days.


Notable Sells

STX Constellation Brands Inc.  Outgoing CEO and Chairman Robert sands sold $67.9 million worth of options and stock.  VP Kane joined the party and unloaded $1 million of this wine and beverage company.  STX has invested $4 billion into Canadian Canopy Growth providing them a strong entry into the marijuana infused beverage industry.

OMC Omnicom insiders sold $1.1 million worth of stock at prices from $75.85-$77.38.  The world’s largest ad agency reported earnings of $1.32 versus consensus of $1.21 on October 16th.  The FBI is reportedly conducting a criminal investigation probing into the ad buying practices of leading media agencies.

COST Costco Wholesale Two insider sold $5.7 million worth of stock from $208.79 to $209.58.  Costco is up 17.89% YTD so this might be just ordinary profit taking and not a sign of slowing consumer purchasing.

DHR Danaher insiders sold $3.9 million worth of stock from $95.77 to $98.04. VP Daniel sold $2.9 million ourtight and Dir Erlich exercised options worth $1.0 million. DHR raised FY18 on October 18th to adj. EPS view to $4.49-$4.52 from $4.43-$4.50.Consensus was $4.49. 

USB US Bancorp CFO unloaded 11.4% of his holdings on 10-18 by selling 15,524 shares at $52.91. This is a not a vote of confidence in the bank’s outlook considering the stock is down 4.45% YTD.  USB has performed far better than pears BAC and WFC which are down 10.10% and 15.05% respectively.

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.