Buys
MHK Mohawk Industries Billionaire Director Balcean continues to buy this beaten down carpet manufacturer with a purchase of $29.6 million at an average price of $118.42
SNX Synex Corp The Washington Service wrote On Oct. 12, SYNNEX Corp. (SNX) shares fell to a three-year low of $72.83. As shown on the graph below, Director Matthew Miau purchased 122,202 shares of the IT supply chain services provider on weakness on Oct. 19, indirectly through Silver Star Developments Ltd. The $9.6 million buy is Miau’s first at the company and marginally increased his holdings, and represents the largest purchase in SNX’s history.
Although Miau does not have an extensive purchasing history, his decision to acquire shares on weakness and the size of his acquisition make this trade worth following. He has also never before purchased at the company, making his recent buy an interesting change in sentiment. Given the stock’s recent trajectory, Miau’s recent acquisition may signal an opportunity to acquire shares at a discount.
TSLA Tesla Inc. Elon Musk capped off a turbulent two weeks of squaring off with the SEC with a purchase of $10 million worth of Tesla stock at an average price of $334.98. In addition to loving the cars, we love the way Musk backs up his bravado with his pocket book. One though does have to wonder about the sources of Musk’s funds as he never sells stock, only buys it and takes no salary. This is reminiscent of bad experiences investors had with Audrey McClendon of Chesapeake Energy. At some point, the money runs out. Is Elon buying on margin? If so this can lead to a dangerous downward price decline in times of turmoil.
FRED Fred’s Inc Company’s stock may be undervalued due to possible shareholder overreaction after a series of recent setbacks to the business. New CEO has been highlighting the value of non-core assets. Amendments to the credit agreement and new Board members’ strong real estate expertise both signal the Company’s preparation for real estate monetization. That may behind newly appointed Heath Freeman’s $7.1 million purchase of company stock at $2.75 and Alden Global Capital interest as they added to their stake with another 1,150,000 shares at $2.66. This is a troubled business and with the market presenting so many new opportunities, we find this one unappealing.
CFR Cullen Frost Bankers Inc Dir Alvarez purchased 54,000 shares at an average price of $93.71. This is a big vote of confidence. Alvarez has great timing as all previous purchase have been winners for him. This one is no exception as the stock has moved a quick 6% to $100.71 at Friday’s close. The entire regional banking sector has seen a surge in insider buying in recent weeks.
SRPT Sarepta Therapeutics CEO Ingram is at it again. He purchased another $2.0 million at average prices of $120.39. Sarepta is a biopharmaceutical company focused on the discovery and development of precision genetic medicines to treat rare neuromuscular diseases. There primary focus is on rapidly advancing Duchenne muscular dystrophy (DMD) therapies that are designed to treat the underlying cause of the disease. Sarepta (SRPT) Sarepta Therapeutics Inc. (SRPT) won approval September 2016 from the U.S. Food And Drug Administration (FDA) for its first drug aimed at treating Duchenne muscular dystrophy (DMD) disorder.
DISH DISH Network Officer DeFranco bought 35,000 shares at $29.16. We have a hard time finding the logic for the continued buying in DISH. Over the top services are taking a real bite out of the TV market. 5G cellular is around the corner and will likely negatively impact traditional broadband service. From what I’ve read the DISH spectrum is no bonanza either for 5G.
FNF Fidelity National Financial the route in homebuilder stocks spilled over to the nation’s larget title company. The depressed price likely represented a bargain to Director Rood when he scooped up 31,200 shares at an average price of $32.51. We would be a buyer here as this sector is very oversold and as long as employment holds up, it’s not apparent to us that the current level of rates will wreck the title insurance business.
NBR Nabor Industries Director Yearwood bought $1 million worth of driller Nabor Industries. With Trump in the White House, this looks like a good bet on increased natural gas and oil drilling in the U.S.
HAS Hasbro Inc. Toy retailer and entertainment conglomerate Hasbro’s longtime CEO and Chairman bought $1 million at $91.90. We traded profitably in this name as we are not a long term buyer.
CMO Capstead Mortgage Company Six insiders bought $612 thousand worth of stock at average prices of $6.72-$6.81.
WMB Williams Companies Four insiders bought $1 million worth of this natural gas pipeline company. It’s CFO Chandler bought $259 thousand at $25.94 and Director Creel bought 25,000 shares at $25.77. We like this play with a plus 5% yield. Natural gas has a brighter future than oil as the future fleet of electrified automobiles will require natural gas generated electricity to run the fleets.
VC Visteon Corp Three insiders bought $687 thousand dollars worth of stock, the largest being Director Wilson’s purchase of 5000 shares at $76.95. VC cut its FY18 revenue forecast and insiders took advantage of the price drop to add to their holding.
LKQ LKQ Corp Director Webster bought $539.9 thousand dollars worth of stock at an average price of $27. This auto scrap parts vendor should provide steady revenue even in economic downturns as repairing a car versus buying a new one becomes a more palatable decision.
Sales
LII Lennox International Inc. Lennox designs, manufactures and markets a range of products for the heating, ventilation, air conditioning and refrigeration (HVACR) markets.
Three insiders unloaded $4.2 million worth of stock at prices from $204.45 to $207. LII has fared a lot better than homebuilders and other construction companies. Perhaps insiders sense that the downtown will impact them soon.
LOVE Lovesac Co. Chairman of the Board Heyer sold $26.3 million of stock at $18.05. It’s not a promising sign when insiders dump 20% of their holdings near a 52 week low.
BWA Borg Warner Three insiders at BWA sold over $1 million worth of stock. Perhaps they are seeing something different than their competitors at Visteon who are buyers not sellers.
DRNA Dicerna Pharmaceuticals Insiders sold a large amount of stock. Two directors unloaded $16 million worth of stock after announcing partnerships with Lilly and Alexion.
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.
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