Airlines, ski resorts, music festivals, bars and restaurants shut down. All sporting events ended or postponed. Near panic shoppers empty grocer’s shelves and a pervasive uneasiness soaks thru the public psyche like a blood stain spreading larger and larger with no sign of stopping. Health care professionals and workers anticipate a tsunami of virus stricken patients fighting for their lives and hordes more wrought with empathetic symptoms who need no medical treatment at all clogging up waiting rooms and hallways.  Vital supplies like testing, hospital beds, surgical masks and ventilators seem inexplicably in short supply. We are told the society needs to practice social distancing but is it  too late to do much to arrest the spread of Covid-19? It’s gone from hoax to horror in just two weeks.

There are a lot of lists going around on stocks to buy, stocks to own after the sell-off as supposedly anyone will know when that ends. I am compiling one such list. During this backdrop insiders have been steadily buying their collapsing stocks. It’s not possible for me to comment on them all as buying is ramping up just about every day but I have highlighted the largest, the most reliable, or even the most interesting ones below. Unless otherwise noted, you can assume they bought it the same day as the report indicates

Monday March 9–  all three Wall Street indices fell more than 7% and most global markets reported severe contractions, mainly in response to the Russia–Saudi Arabia oil price war. This was the worst drop since the Great Recession in 2008.

40 purchases over $200,000

CWH Camping World Chairman and TV celebrity Marcus Lemonis continues to buy, purchasing $535.6K  at $10.71 on 3/9. Camping is the one thing everyone might be doing more of as a result of the virus but it’s hard to say people will have the money to buy new or used campers if the recession is deep.

EQH Equitable Holdings Director and a CEO nibbled at the trough buying 12,890 shares at $19.36 and 12,635 at $15.48  between 3/5- 3/9. A lot will depend on how low interest rates stay and for how long. Also the ultimate mortality rate for the virus is unknown but more importantly how does it change overall mortality rates since so many of its victims will be elderly and were expected to die. It may not be as severe as the market anticipates  The other business, Alliance Bernstein, no doubt will have less revenue as asset values decline but at least consistent as most products are based on a percentage of revenue from assets under management. EQH closed at $16.15 on Friday

EVR Evercore CFO Walsh buys $460.1K at $62.54 increasing his holdings by 8.1% over a two day stretch 3/5 and 3/6.  I like CFO buys but this isn’t a significant increase in his holdings considering the price drop. I’ll be watching to see if he buys more.

FCX Freeport-McMoRan Inc. CEO and CFO step up and purchase 250,000 and 85,000 shares at $10.02 and $10.03 on 3/5. I scratched my head trying to understand the logic behind this buy. FCX is a large copper and gold producer. Gold sank in price but fared better than copper.

HPP Hudson Pacific Property Dir increased his holdings by 36.6% purchased 19,000 shares at $26.37 on 3/6. HPP yields 3.72%.

LCII LCI Industries Chairman Gero bought $914K worth of stock at $91.40 on 3/5 LCI Industries supplies a broad array of highly engineered components for the leading original equipment manufacturers (OEMs) and the related aftermarkets. Through our wholly-owned subsidiary, Lippert Components, Inc. (LCI®), we supply, domestically and internationally, premium components for the recreational vehicle (RV) and adjacent industries, including buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; boats; trains; manufactured homes; and modular housing.  The company has been diversifying but think RVs as that’s it core.

LNC Lincoln National CEO Glass bought $1 million of stock at $35.43 down from a recent of high of $60.  It closed Friday at $28.86. Many of the same concerns with life insurance companies are compounded by low rates and mortality rates.  The tangible book value of LNC for the most recent quarter is $91.07. Lincoln National repaid the Government $1 Billion loan from the TARP bailout in 2018 by 2010.  Expect similar treatment should mortality rates escalate to extremes. I think the market is over reacting as you see several insurance company insiders buying. This purchase was made over three days, last being done on 3/9.

QRTEA Quarate Retail Inc.  CEO George bought $3 million worth at $5.44.  His track record isn’t good but one thing for certain is more people will be watching TV as everything closes down over the virus. They dominate TV shopping, owning HSN and QVC, amongst other brands. CEO George bought $3 Million at $5.44.

SKYW SkyWest Inc Amazingly enough two insiders, Director and Chairman bought $330.1K and $587.4K at $36.71 and $37.90. Insiders are the ultimate contrarian investors with the exception they are especially well-informed. Coincidentally we had a SkyWest pilot come into our office Friday to discuss retirement planning. He explained they would not be as impacted as they fly small planes on connecting routes, in many cases the only option for some towns.

Tues March 10Shares on Wall Street surged on Tuesday, rebounding from their sharpest drop in more than a decade, as investors seemed to take comfort from efforts in Washington to protect the economy from damage caused by the coronavirus outbreak.

61 purchases over $200,000

BKCC BlackRock Capital Chairman bought $457.9K at $4.14 nearly doubling his holdings.

BPYU Brookfield Property Dir Clark bought $1.00 million at $15.89 in a new purchase.

CPE Callon Petroleum Director Steven Webster bought $615.3k at $1.03 on 3/9.

LNG Cheniere Energy Director bought 6,331 shares at $39.44 LNG has long term fixed price contracts from state backed energy companies on 3/10.

CROX Crocs, In Director bought $37.3K at $23.73 on 3/6

DCP DCP Midstream Chairman $497.9K at $7.72. I am seeing a lot of buying in a variety of midstream oil and gas infrastructure.

DVN Devon Energy Dir Rattie bought 20,000 at $11.53

EBIX Ebix Chairman bought  10,000 shares at $21.82 on 3/9.

ET Energy Transfer Dir Ray Davis bought 1,281,000 at $19.89 on 3/9.

EPD Enterprise Products CEO Teague bought 12,500 shares at $19.89

HXL Hexcel Corp Chairman bought $1.1 million of this leading carbon composite company at $55.96 on 3/9. HXL has a lot of commercial aerospace business, about 50%, the other weighted to defense.

KAR Kar Auction Services insiders buy $1M and 901K at prices between $16.88 and $18.34 between 3/6 and 3/9.  I like this buy.  Auction services are in demand.

LOW Lowe’s CEO bought 10,000 shares at $103.86 on 3/6.

NS NuStar Energy LP Chairman and Director bought $2.4M and $324.3K at $12.24 and $12.97.

OKE ONEOK Inc Chairman bought 12,700 at shares at $39.11 on 3/9. Insiders at energy infra-structure companies are some of the heaviest buyers of stocks.

PLNT Planet Fitness Director bought 25,000 shares at $63.47 for $1.6M in a new purchase on 3/6.

RVLV Revolve Group Co-CEOs bought $1.6 M and$1$1.0 M at 3/6 -3/10, both new purchases. RVLV is an e-commerce platform that caters to millennial and generation Z consumers.

WES Western Midstream Partners Dir Crane bought $2 million at $5.87, upping his holdings by 40%. Western is mostly owned by Occidental Petroleum and is on the block but OXY hasn’t found the price they like yet.

WMB Williams Companies CEO and Director purchased$502.6K and $250.9K worth of stock in this natural gas pipeline company.

WH Wyndham Hotels & Resorts  Dir Nelson buyS 5000 shares at $49.17 on 3/6

Wednesday March 11 The Dow shed 1,464.94 points during the session, or 5.9%, sending it more than 20% below its recent high from February and into a bear market. The N.B.A. abruptly suspended its season on Wednesday after a Utah Jazz player was found to have tested positive for coronavirus moments before a game began in Oklahoma City.

57 purchases over $200,000

ARMK Aramark CEO bought 40,000 shares at $25.82 for $1.0 M. This was interesting as I would assume ARMK is hard hit in the restaurant, stadium and food service business.

Cleveland-Cliffs Chairman bought 200,000 at $4.49.  This upped his holdings by 5.9% on 3/11.

FANG Diamond Bank Energy CEO modestly increased his holding with 17,146 shares at $4.49m on 3/10.

HD Home Depot VP bought $1.0 M at $210.78 increasing his holdings by 5.9% on 3/9.

LCII LCI Industries Director Ronald Fenech bought 10,000 shares at $82.99 on 3/9

MA Mastercard  Dir Uggia bought 10,000 shares at $265.00

RJF Raymond James insider Godbold bought $820.2K at $65.40

Thursday March 12 The Dow shed 1,464.94 points during the session, or 5.9%, sending it  into a bear market. Sell-off was attributed to the lack of investor confidence in US President Donald Trump after he declared a 30-day travel ban against the Schengen Area only to reverse it over the weekend to all of Europe.

66 purchases over $200,000

AMG Affiliated Managers CEO Horgen buys 10,000 at $53.12. Revenue will be down but management fees on assets under management will still get paid..

BXP Boston Properties Dir buys 4000 at $123.00 on 3/11. The same director bought 4,000 shares two days earlier at $122. This office property REIT pays 3.5%.

BG Bunge insiders continue to buy stock in this large agribusiness. The business is not particularly attractive but in normal times. The largest being the CEO’s purchase of $4.8 M at $39.85 on 3/11. I think this company is for sale, maybe to the Chinese. See our post here Bunge Buy or Bust

CWH Camping World Holdings Marcus Lemonis purchases another 100,000 shares at $6.33.  He is averaging down.

ECH Encompass Health officer buys 40,000 shares at $64.24 on 3/11. This is national network of inpatient rehabilitation hospitals and home health and hospice agencies. I doubt if hospitals and rehab centers have liability for the corona virus if they take prudent and reasonable precautions. There will certainly be a growing pool of customers for rehab, home health care, and hospice with an aging population.

HXl Hexcel Corp Chairman buys another 20,000 at $45.15.

HFC Holly Frontier CFO buys 20,000 at $20.75. I read that refiners would do well with plunging oil but I can’t verify that is true when demand plunges as well.

KMI Kinder Morgan CEO Richard Kinder, of course buys more of his namesake company.  KMI is 60% natural gas pipelines. Heating your home is not discretionary but this company encompasses all aspects of the carbon transportation pipeline.

STC Stewart Information CEO buys $485K at $33.26. Title insurance should do well if rates stay low.  Companies are already reporting a surge in refinancing but you need a job for that as well. The CEO bought in February and October and November.

WETF Wisdom Tree buys 100,000 at $3.00.  Insiders have been buying this ETF vendor for some time.

WYND Wyndham Destination CEO buys some stock but confidence, money, or both is waning as this was a small buy of 8,000 at $24.62.

Friday March 13  March Madness and along with it all college basketball canceled and the seriousness of the pandemic sunk into a large swath of sport fans. President Trump, surrounded by business leaders, said coronavirus tests would soon be more widely available. The stock market roared back to life on Friday, with the S&P surging 9.3 percent after President Trump said the government would speed up coronavirus testing for Americans and provide economic relief to sick workers and  major industries directly impacted by the virus.  He said we would stop selling oil from the Strategic Petroleum Reserve and instead buy oil while it is cheap and fill up , right to the top. In doing so, he delivered investors exactly the message they had been waiting to hear — a half-hour before the market closed.

72 purchases over $200,000

BPYU Brookfield Property Director Clark buys $2.1 million of this property REIT at $13.22 on 3/11-3/12

BG Bunge Director buys 11,000 at $37.26

CHDN Churchill Downs Director buys $655K.  Kentucky Derby may be postponed but horse will run again, no doubt.

CLR Continental Resources Director buys 110,000 shares at $8.65. I never thought I’d see this price in Bakkan shale oil leader.

DCO Ducommun buys $509K at $33.93. Insiders bought stock last week, too.

EBIX Ebix Chairman buys $868K.

ECH Encompass Health Officer buys 125,000 at $58.69. He also bought earlier in the week at $64.

ET EPD Energy Transfer Products and Enterprise Products insiders at again in large numbers.

XOM Exxon Mobil insider  bought 8,771 at $45.72. on 3/9.  XOM now has a 9% dividend yield not covered by its free cash flow.  Company has a strong balance sheet but something has to give.    Trump said they were going to fill up the strategic reserve to the top. Kudlow, economic advisor to the President said they would buy $75 million barrels of crude.  The U.S imports about 9  million barrels per day according to the EIA.  You can do the math yourself but that want arrest the fall of oil very much. Tariffs from tariff man are need.  I think the market will have to see it to believe it.

Many more names but fingers and mind are exhausted.  I’ll finish the rest tomorrow.

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 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.

Prosperous Trading,

Harvey Sax