Insider Buying Wk Ending 1-3-20


Duncan is at it again, buying massive amounts, $6.8 million at an average price of $27.90, of midstream E&P company, Enterprise Products Partners, LP.  EPD yields a little over 6%.

Next on the list is Director Omtvedt’s purchase of 40,000 shares of food conglomerate Conagra Brands at $33.99. This was particularly notable because not only did he more than double his holdings, this purchase was made after the stock rose 18% on a Q2 earnings beat and a higher than expected organic sales growth of 1.6%. This long time food industry executive has been a board member since 2016.  Insiders usually buy when their stocks are depressed but when they buy near the recent highs, it usually means business is good and getting better . This is our favorite kind of insider buying and we will be loading up on CAG over the next few days if it doesn’t plow higher.

Biotech is on fire.  I’ve been at this game a long time and biotech goes through feast and famine and the last three months have seen one of the sharpest rallies in history, especially amongst the micro cap group.  This has been ignited by the lessening angst of investors about concerns of federally controlled drug pricing and a handful of cash takeovers at more than double the trading price.  It was quite predictable that an insider buy of 100,000 shares of micro cap biotech early stage company, Cassava Sciences at $5.53 would engender a fierce price reaction.  What is astounding is that the Chairman Remi Barbier bought the stock up nearly 200% from where Director Sanford Robertson just purchased 500,000 shares at $2.10 around December 20th.  SAVA closed at $9.65 Friday.  This stock is up nearly five fold in less than a month.

What triggered this euphoric run  is clinical data from a Phase 2a Company scientists presented the new data during a late-breaking oral presentation at the 12th International Conference on Clinical Trials on Alzheimer’s Disease, or CTAD, in San Diego, CA on December 5th. From the presentation, ” Consistent with over 10 years of basic research and pre-clinical data, the new data show clinical evidence of PTI-125’s mechanism of action and drug-target engagement, including: Improvements in biomarkers of Alzheimer’s disease in plasma and lymphocytes; Consistency across biomarker improvements in CSF, plasma, and lymphocytes; Significant reductions (pless than0.01) in both nitrated and phosphorylated forms of tau protein; Evidence that each individual patient showed biomarker responses to PTI-125; Evidence that PTI-125 reversed the shape of altered filamin A in lymphocytes; Early clinical validation of the drug target – altered filamin A – as a facilitator protein between amyloid beta and both neuroinflammation and tau pathology. Cassava Sciences expects to publish a manuscript of these new clinical data in a peer-reviewed medical journal.”

We’re kind of kicking ourselves for missing this one but it happened so fast during the holiday season, that unless one had one finger on the keyboard and the other on insider filings, you didn’t see it coming.  We normally do have one finger on that keyboard.  Bottom line is we missed it and from our analysis, everything about the company looks legit for a development stage biotech  You can be sure they will be doing as big as a secondary as they can right now as the path to a drug here is years and hundreds of millions of dollars a way if ever.  SAVA has only about $17 million in the bank.