After weeks of dull action, insider buying has finally picked up. Part of it is the end of 2nd Quarter earnings blackout and part of it is the market sell-off.  The highlights:

Charlie Egren, the founder of Dish, is making a massive bet on 5G, buying assets in the pending TMobile Sprint network and committing billions to buy more bandwidth.  Its a bet the farm expensive gamble on a player late to the game.  But if the competing networks are slow in getting 5G rolled out, Dish might be able to lumber in and get a piece of the future without the steep prices others have paid.

Chairman of the Board, William Clay Ford, bought $7.9 million worth of his namesake. God only knows why. Ford has been dead money for years and we don’t see a reason for that to change. Perhaps Ford is getting a handle on the unprofitable operations.  The 6% dividend is attractive, especially if they can show some growth in earnings.

Several insiders bought Marathon Petroleum midstream spinoff, MPLX.  This one looks like money in the bank to us; 9.7% yield, interest rates headed lower, and trading at a 5 year low.  Oil and Gas looks like an investment wasteland, the worst-performing sector YTD.  That’s exactly why insiders are buying this sector. Investments in Occidental, Northern Oil and Gas, and Williams Co all showed up on our screens this week.  We like Occidental, it’s 6% dividend and Carl Icann agitating.  We also like Williams which has a 6.3% dividend yield with a stable natural gas pipeline business.

The next worst-performing sector is the banking group.  Standout JP Morgan has been attracting million dollar insider buys all year. It’s proved to be good trading but until interest rates show some signs of rising, don’t expect much more than a trading range and a 3.28% dividend which isn’t all that bad considering the 10 yr is yielding 1.75%.

Insiders come back to the well at online education company, 2U Inc, with million-dollar purchases. 2U Inc had a disastrous 2nd quarter losing 80% of its market cap.  One of the things we look at is the winning percentages that particular insiders have. The guys at 2U Inc don’t inspire confidence.

Here’s a hail mary pass.  Two insiders buy almost $2 million of Tenneco, an auto and truck parts company.  Ten is trading at 27 year low.

Mylan’s Chairman, Robert Coury, bought $1 million worth of the generic drug manufacturer.  Mylan is in part depressed in price due to litigation threats from opioid lawsuits.  We despise Coury as this is the man that turned down $70 plus offer for the company from Mylan. We don’t like management who has other agendas than shareholder’s best financial interests.

 

 

 -Type Company Market Cap ($B) Insider Relation Type Shares Price Mkt Val Ending % Chng
AINC Ashford Inc  $0.074 Welter Jeremy Pres Purchase 23,225  $29.27  $679,768 30,000 342.8%
ALGN Align Technology Inc  $15.037 Hogan Joseph M CEO Purchase 4,995  $199.83  $998,169 166,940 3.1%
ALGN Align Technology Inc  $15.037 Pudipeddi Vamsi Mohan Raj VP Purchase 1,100  $188.11  $206,921 1,100 NEW
ARNC Arconic Inc  $11.194 Plant John C Chmn Purchase 30,463  $24.13  $735,057 328,745 10.2%
BCDA BioCardia Inc  $0.032 Stertzer Simon H Chmn Purchase 166,666  $6.00  $999,996 1,003,083 19.9%
BCPC Balchem Corp  $2.912 Mason Scott C VP Purchase 3,000  $84.74  $254,220 12,524 31.5%
BERY Berry Global Group Inc  $5.611 Salmon Tom Chmn Purchase 5,000  $43.75  $218,725 30,400 19.7%
BHR Braemar Hotels & Resorts Inc  $0.297 Nunneley Mark L Officer Purchase 25,000  $8.08  $202,000 218,932 12.9%
BSIG BrightSphere Investment Group Inc  $0.828 Yang Guang Chmn Purchase 50,000  $9.10  $455,000 50,000 NEW
CADE Cadence BanCorporation  $2.034 Harrison William B Jr Dir Purchase 64,168  $15.53  $996,529 667,860 10.6%
CARS Cars.com Inc  $0.602 Vetter Thomas Alex CEO Purchase 20,000  $10.19  $203,800 258,973 8.4%
CC Chemours Co  $2.374 Shelton David C VP Purchase 15,000  $13.82  $207,257 98,761 17.9%
CHE Chemed Corp  $6.807 Walsh George J III Dir Purchase 500  $412.86  $206,430 8,261 6.4%
CLF Cleveland-Cliffs Inc  $2.425 Koci Keith CFO Purchase 30,000  $8.39  $251,682 74,349 67.6%
CVX Chevron Corp  $232.404 Reed Debra L Dir Purchase 4,250  $118.14  $502,074 7,097 149.3%
CXO Concho Resources Inc  $14.761 Bridwell Tucker S Dir Purchase 7,000  $70.32  $492,240 50,815 16.0%
CXO Concho Resources Inc  $14.761 Harper Jack F Pres Purchase 10,000  $65.40  $654,000 170,605 6.2%
DISH DISH Network Corp  $15.443 Ergen Charles W Chmn Purchase 500,005  $31.45  $15,723,157 4,128,848 13.8%
EBAY eBay Inc  $34.598 Murphy Matthew J Dir Purchase 6,000  $38.79  $232,736 6,000 NEW
ENR Energizer Holdings Inc  $2.544 Hoskins Alan R CEO Purchase 10,000  $35.00  $349,956 260,337 4.0%
ENR Energizer Holdings Inc  $2.544 Kinder Gregory T VP Purchase 6,000  $36.43  $218,590 37,767 18.9%
F Ford Motor Co  $38.141 Ford William Clay Jr Chmn Purchase 840,962  $9.51  $7,995,783 1,246,713 207.3%
FLMN Falcon Minerals Corp  $0.524 Hirshberg Al J Dir Purchase 50,000  $6.25  $312,340 85,543 140.7%
FUND Sprott Focus Trust Inc  $0.188 George William Whitney Dir/>10% Own Purchase 64,725  $6.67  $431,742 10,313,585 0.6%
GHL Greenhill & Co Inc  $0.319 Bok Scott L CEO Purchase 139,220  $14.36  $1,998,531 1,830,022 8.2%
GNE Genie Energy Ltd  $0.195 Courter James A Officer/Dir Purchase 56,649  $7.01  $397,138 343,632 19.7%
JPM JPMorgan Chase & Co  $351.276 Hobson Mellody L Dir Purchase 18,200  $109.91  $2,000,362 101,359 21.9%
LHX L3Harris Technologies Inc  $47.482 Hay Lewis III Dir Purchase 9,800  $203.34  $1,992,732 15,028 187.5%
LNDC Landec Corp  $0.331 Obus Nelson Dir Purchase 20,000  $10.72  $214,400 2,843,215 0.7%
MAC Macerich Co  $4.309 Coppola Edward C Pres Purchase 18,223  $30.78  $560,946 348,197 5.5%
MHK Mohawk Industries Inc  $8.511 Bruckmann Bruce C Dir Purchase 2,000  $117.69  $235,375 287,691 0.7%
MPLX MPLX LP  $28.925 Heminger Gary R Chmn Purchase 42,600  $27.18  $1,158,081 288,086 17.4%
MPLX MPLX LP  $28.925 Peiffer Garry L Dir Purchase 18,000  $27.15  $488,646 63,999 39.1%
MPLX MPLX LP  $28.925 Sandman Dan D Dir Purchase 36,630  $27.26  $998,534 97,872 59.8%
MSTR Microstrategy Inc  $1.435 Rechan Leslie J Dir Purchase 1,900  $136.98  $260,262 1,900 NEW
MYL Mylan NV  $9.846 Coury Robert J Chmn Purchase 49,859  $20.06  $1,000,012 1,383,587 3.7%
NOG Northern Oil & Gas Inc  $0.678 Akradi Bahram Chmn Purchase 1,337,588  $1.60  $2,141,612 17,065,999 8.5%
OAK B Oaktree Cap Group LLC  $8.182 Gilbert Steven Jeffrey Dir Purchase 25,000  $26.62  $665,603 25,000 NEW
OXY Occidental Petroleum Corp  $35.269 Shearer Robert M Dir Purchase 15,000  $50.22  $753,258 19,218 355.6%
PB Prosperity Bancshares Inc  $4.558 Timanus H E Jr Officer/Dir Purchase 10,000  $64.39  $643,864 415,097 2.5%
PENN Penn National Gaming Inc  $2.140 Handler David A Dir Purchase 30,000  $17.68  $530,400 169,870 21.4%
PNFP Pinnacle Financial Partners Inc  $4.328 Ingram David B Dir Purchase 24,100  $54.15  $1,305,027 203,466 13.4%
RGR Sturm Ruger & Co Inc  $0.739 Jacobi C Michael Dir Purchase 15,000  $44.43  $666,450 35,199 74.3%
SFNC Simmons First Natl Corp  $2.430 Makris George A Jr Chmn Purchase 13,518  $24.38  $329,603 405,845 3.4%
TCBK Trico Bancshares  $1.116 Koehnen Michael W Dir Purchase 15,000  $35.83  $537,450 192,096 8.5%
TEN Tenneco Inc  $0.772 Guo Peng VP Purchase 140,000  $9.32  $1,305,206 278,472 101.1%
TEN Tenneco Inc  $0.772 Hollar Jason M CFO Purchase 60,000  $9.44  $566,280 70,404 576.7%
TUP Tupperware Brands Corp  $0.723 Goings Everett V Dir Purchase 33,500  $15.00  $502,369 103,853 47.6%
TWI Titan International Inc  $0.182 Taylor Maurice M Jr Chmn Purchase 139,214  $3.04  $422,709 689,084 25.3%
TWLO Twilio Inc  $17.894 Immelt Jeffrey R Dir Purchase 8,500  $122.78  $1,043,671 11,630 271.6%
TWOU 2U Inc  $0.960 Peters Gregory K Dir Purchase 72,358  $13.95  $1,009,394 98,102 281.1%
TWOU 2U Inc  $0.960 Stavis Robert M Dir Purchase 75,000  $13.43  $1,007,595 174,577 75.3%
UVE Universal Insurance Holdings  $0.951 Donaghy Stephen J CEO Purchase 10,000  $26.61  $266,117 511,983 2.0%
UVE Universal Insurance Holdings  $0.951 Downes Sean P Chmn Purchase 7,000  $28.68  $200,787 1,438,833 0.5%
VAC Marriott Vacations Worldwide Corp  $3.894 Weisz Stephen P CEO Purchase 4,000  $83.70  $334,785 250,239 1.6%
VICI VICI Properties Inc  $9.759 Payne John W R Pres Purchase 10,635  $21.18  $225,249 71,576 17.5%
WMB Williams Companies Inc  $29.076 Chandler John D CFO Purchase 10,000  $23.24  $232,396 83,052 13.7%
WMB Williams Companies Inc  $29.076 Chazen Stephen I Dir Purchase 10,000  $23.93  $239,300 55,730 21.9%
WMB Williams Companies Inc  $29.076 Armstrong Alan S CEO Purchase 10,000  $23.47  $234,653 738,461 1.4%
WYND Wyndham Destinations Inc  $3.766 Brown Michael Dean CEO Purchase 5,000  $40.16  $200,809 115,354 4.5%
XCUR Exicure Inc  $0.193 Venkatesan Jay Dir Purchase 250,000  $2.00  $737,500 650,049 62.5%
XCUR Exicure Inc  $0.193 Walt David R Dir Purchase 1,000,000  $2.00  $2,950,000 1,767,711 130.3%

Insiders sell stock for many reasons, but they generally buy for just one – to make money. THE INSIDERS FUND invests 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.  This is as close to “insider information” that an ordinary investor is likely to see- and it’s entirely legal.  Officers, directors, and 10% owners are required to inform the public through a Form 4 Filing any transaction, buy, sell, exercise, or any other with 48 hours of doing so. This info is available for free from the SEC’s Web site, Edgar, although we subscribe to the Washington Service as they provide a way to manage and make sense of the vast realms of data.

As a rule, 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. Unfortunately, the public information disclosure requirements about these programs referred to as Rule 10b5-1 is horrendously poor.  I also generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and perhaps not the smart money we are trying to read the tea leaves on.

Of course, unintuitive as it may seem, insiders can also be wrong about their Company’s prospects, they can easily be wrong about how much others will value them, and in many cases, maybe most cases have no more idea what the future may hold than  you or I. In short, you can lose money following them.  We have and we curse aloud, what were they thinking!  Needless to say, past good fortune is no guarantee of future success.  We may own positions, long or short, in any of these names and are under no obligation to disclose that. We welcome your comments on our analysis.

This blog is solely for educational purposes and the author’s own amusement.  Investing with The Insiders Fund is for qualified investors and by Prospectus only. Nothing herein should be construed otherwise.  To learn more about our strategy, visit our website.

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


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