The stock market reached a new all-time high.  Insiders yawned. There was not much insider trading, neither buying nor selling. We outline the ones that grabbed our attention.

BUYS

HOFT undervalued
Can Hooker stock be a treasure chest for investors?

HOFT Hooker Furniture.  3 insiders bought stock in this $350 million market cap furniture maker.  The largest buy was from Director Williamson who scooped up $225,000 at $28.13.  Hooker reported organic growth of 6% in the 1st quarter.  The stock is trading at its lowest P.E multiple in 5 years at 8.60 x earnings.  With a healthy economy, continued low-interest rates and a rebounding house market into the seasonally strong selling season, HOFT represents a reasonable speculation and we are nibbling at it.

VBTX Veritex Holdings Inc -3 insiders bought $468.6K worth of stock between $35.88 and $25.68 and $25.88 per shares.  Newly appointed CFO Earley bought 6800 of those.

Veritex Holdings, Inc. operates as the holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals.  It’s hard for me to see get excited about the banking sector without interest rates rising again in the near future.

CCI  Crown Castle International Corp (Mkt Cap: $49.8B) Martin J Landis, Chairman of the Board bought $2.3M worth of cell tower REIT at $123.13.  Landis has a winning hand as an insider. according to the Washington Service.5 G deployment should provide a multi-year tailwind for cell phone tower upgrades and CCI is positioned the best of its peers.  The dividend yield of 3.60% already reflects a safe predictable outcome. It might be a trade but better ideas abound.

insider trading for CCI
Landis is a winner

SELLS

 

ABG Asbury Automotive Group Inc  4 insiders unloaded $2.6M worth of stock after ABG reached a 3 year high.   Automotive sales are predicted to decline this year. J.D. Power says it expects U.S. auto sales to fall to their slowest pace in more than four years when automakers report first-quarter numbers this week. The firm projects that the annual sales rate during the first quarter fell to about 16.7 million vehicles. Depending on the final numbers reported by automakers, the pace of sales during the first quarter could be the lowest since the fourth quarter of 2014.  Companies like Carvana are disrupting the traditional dealer model.

Perhaps it’s time for you to sell too.

In this report, we examined open market purchases from employees and directors.  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 from 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 is 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.

THE INSIDERS FUND is a long-short equity fund. We invest in companies at or near prices that management has been willing to invest significant amounts of their own money in. After all, who knows a business better than the people running it?  You’ve always heard the best information is “inside information”. The SEC mandates that officers, directors and 10% shareholders file a Form 4 detailing buying and selling in their company’s stock within 48 hours. The SEC makes this info public immediately upon receiving it. This is as close to “insider information” that an ordinary investor is likely to see. Our Fund provides complete liquidity with no lock-ups. We only invest in transparent and liquid Level 1 securities. This strategy involves taking long positions in stocks that are expected to increase in value and short positions in stocks that are expected to decrease in value  We may own positions, long or short, in any of these names and are under no obligation to disclose that.

If you would like to hear more about how you can get involved with the Insiders Fund, please schedule some time on my calendar.