Insider Buying Week Ending 11/1/19

It’s really quiet on the Western Front when it comes to insider buying.  American Airlines insiders continue to buy. James Clemmer CEO of AngioDynamics bought a small amount on a poor earnings showing. This might be window dressing. Richard Kinder keeps on amassing KMI.  Why not? If you were the billionaire namesake, you would know the 5% dividend is money in the bank. I like the Lilly buy. If you can grab stock near that price you will probably do well. FedEx is bold; the biggest director buy and the first for  board member Edwardson since 2008.

Ticker Company Insider Relation Shares Price Mkt Val Ending % Chng
AAL American Airlines Group Inc Albaugh James F Dir 10,000  $31.41  $314,070 36,091 38.3%
ANGO AngioDynamics Inc Clemmer James C CEO 15,000  $14.19  $212,850 260,418 6.1%
LLY Lilly (Eli) & Co Skovronsky Daniel VP 5,000  $108.61  $543,050 75,818 7.1%
OPK Opko Health Inc Frost Phillip Chmn 350,000  $1.40  $491,120 219,871,633 0.2%
AGO Assured Guaranty Ltd Feldstein Andrew T Officer 22,900  $46.75  $1,070,683 221,400 11.5%
F Ford Motor Co Lechleiter John C Dir 25,000  $8.68  $216,998 90,000 38.5%
REED Reed’s Inc Bello John Chmn 1,666,666  $0.60  $1,000,000 2,283,120 270.4%
KMI Kinder Morgan Inc Kinder Richard D Chmn 300,000  $20.17  $6,051,390 254,053,722 0.1%
OPK Opko Health Inc Frost Phillip Chmn 200,000  $1.47  $294,140 220,071,633 0.1%
TTS Tile Shop Holdings Inc Kamin Peter H Chmn 426,295  $1.77  $756,290 5,941,545 7.7%
AGO Assured Guaranty Ltd Feldstein Andrew T Officer 22,800  $47.20  $1,076,046 244,200 10.3%
OPK Opko Health Inc Frost Phillip Chmn 200,000  $1.44  $288,540 220,271,633 0.1%
CBTX CBTx Inc Penland Joe Sr Dir 9,695  $28.42  $275,490 344,389 2.9%
ECA Encana Corp Ricks Thomas G Dir 62,500  $3.96  $247,494 258,657 31.9%
FDX FedEx Corporation Edwardson John A Dir 10,000  $154.13  $1,541,250 67,966 17.3%
KMI Kinder Morgan Inc Kinder Richard D Chmn 300,000  $20.01  $6,003,630 254,353,722 0.1%

Insiders sell 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.

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