WARNING- BUYING STOCKS BEFORE EARNINGS ANNOUNCEMENTS CAN BE ESPECIALLY RISKY.

Stocks have outsized moves on earnings. We analyze these companies carefully where large insider buys might provide some insight.

Ticker Transaction Detail
 -Type Company Company Value Insider Relation Min Trade Date Shares Price
KMI Kinder Morgan Inc 128,530,964 Kinder Richard D Chmn 8/23/2019 700,000  $19.87
KMI Kinder Morgan Inc 128,530,964 Kinder Richard D Chmn 5/29/2019 300,000  $19.68
KMI Kinder Morgan Inc 128,530,964 Kinder Richard D Chmn 4/23/2019 1,307,164  $19.57
KMI Kinder Morgan Inc 128,530,964 Kinder Richard D Chmn 2/28/2019 888,736  $19.47
KMI Kinder Morgan Inc 128,530,964 Kinder Richard D Chmn 1/29/2019 2,399,304  $18.62
UNH UnitedHealth Group Inc 4,635,730 Wichmann David S CEO 5/3/2019 20,000  $231.79
CCI Crown Castle International Corp 4,334,925 Martin J Landis Chmn 7/23/2019 16,300  $127.33
CCI Crown Castle International Corp 4,334,925 Martin J Landis Chmn 4/24/2019 18,350  $123.13
JPM JPMorgan Chase & Co 4,193,047 Hobson Mellody L Dir 8/8/2019 18,200  $109.91
JPM JPMorgan Chase & Co 4,193,047 Hobson Mellody L Dir 4/16/2019 19,700  $111.30
UNH UnitedHealth Group Inc 1,499,534 McNabb Frederick William III Dir 5/1/2019 6,430  $233.21
PNFP Pinnacle Financial Partners Inc 1,305,027 Ingram David B Dir 8/6/2019 24,100  $54.15
FFIN First Financial Bankshares Inc 1,158,310 Trotter Johnny E Dir 4/30/2019 14,000  $61.13
FFIN First Financial Bankshares Inc 1,158,310 Trotter Johnny E Dir 3/14/2019 5,000  $60.49
EWBC East West Bancorp Inc 1,000,314 Ng Dominic Chmn 8/27/2019 25,840  $38.71
IBKC IBERIABANK Corp 972,530 Koerner John E III Dir 5/28/2019 13,000  $74.81
UAL United Airlines Holdings Inc 820,000 Shapiro Edward L Dir 8/14/2019 10,000  $82.00
JBHT Hunt (JB) Transport Svcs Inc 708,850 George Gary Charles Dir 5/3/2019 7,500  $94.51
URI United Rentals Inc 591,362 Roof Donald C Dir 7/22/2019 5,000  $118.27
JPM JPMorgan Chase & Co 518,950 Crown James S Dir 2/5/2019 5,000  $103.79
BK Bank of New York Mellon Corp 509,921 Daley William M Officer 7/18/2019 11,350  $44.93
GPC Genuine Parts Co 495,050 Sonnemaker Scott Officer 5/7/2019 5,000  $99.01
CFG Citizens Financial Group Inc 486,750 Koch Charles John Dir 8/20/2019 15,000  $32.45
UNH UnitedHealth Group Inc 455,094 Flynn Timothy Patrick Dir 8/28/2019 2,000  $227.55
JNJ Johnson & Johnson 419,040 Hewson Marilyn A Dir 6/11/2019 3,000  $139.68
IBKC IBERIABANK Corp 381,198 Cooper Angus R II Dir 3/14/2019 5,000  $76.24
MS Morgan Stanley 332,979 Simkowitz Daniel A Officer 4/18/2019 7,000  $47.57
NVR NVR Inc 295,292 Jung Alexandra A Dir 5/20/2019 70  $3,285.00
NVR NVR Inc 295,292 Jung Alexandra A Dir 2/12/2019 25  $2,613.68
PM Philip Morris International Inc 291,330 Kunst Michael R VP 5/29/2019 1,000  $79.66
PM Philip Morris International Inc 291,330 Kunst Michael R VP 4/29/2019 2,500  $84.67
IBKC IBERIABANK Corp 264,250 Maples Ricky E Dir 3/11/2019 1,000  $75.25
IBKC IBERIABANK Corp 264,250 Maples Ricky E Dir 1/29/2019 2,500  $75.60
EWBC East West Bancorp Inc 250,816 Krause Douglas VP 8/27/2019 6,400  $39.19
EWBC East West Bancorp Inc 250,240 Oh Irene H CFO 8/27/2019 6,400  $39.10
ABT Abbott Laboratories 249,875 Stratton John G Dir 1/31/2019 3,455  $72.32
STLD Steel Dynamics Inc 247,238 Alvarez Miguel VP 9/6/2019 8,920  $27.72
* – Market Cap at the time of the transaction.
1 – (Trans or Market Price – Exercise Price) x Shares.
C – Some or all shares sold to company.
F – Date was qualified with footnote on form.
P – Traded per pre-arranged plan (10b5-1).
O – Return period open, longest available return shown.

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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