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Most investors are putting together lists of bargain priced buys.  Here is our developing list.We track insider buys very closely and in this report. The 1st quarter ending March 31 is over and many companies enforce a black-out period preventing insiders to buy or sell their company’s stock. We are holding a lot of powder dry as we wait for a tsunami of buying once the black out ends. If not, we are all in a lot of trouble.  I did not like the Delta DAL sale announced on Friday by Berkshire Hathaway. We also closely scrutinize 10% holders as they tend to be hedge funds and perhaps not as meaningful as a director or officer spending hard earned monies. This is what stood out.

Friday April 3, 2020

HD Supply Holdings, Dir Odland makes a massive buy of $7.0M at $26.23 upping his holdings by 29.3%. HD Supply offers a diverse range of products and services to the Maintenance, Repair and Operations and Specialty Construction market sectors in the U.S. and Canada. They announced that the planned separation of their construction business from the building maintenance business has been delayed due to Covid-19.  Not my favorite balance sheet and too much uncertainty in the trades market for me.

Thursday April 2, 2020

Wednesday April 1, 2020

MGM MGM Resorts Dir Meister buys 100,000 at $10.97 for $1.1 M Meister was joined by Dir Salem with 182,000 at $10.87 for our buy of the week. The CFO bought $299.9 K at $12.  We hear from good sources casinos reopen May 8th in Las Vegas. There will be some great deals on hotel rooms for sure but don’t touch a one armed bandit when you go.

Tuesday March 31st, 2020

SNX SYNNEX Corp Dir Miau buys 52,000 at $74.20 for $3.9 M but take this with a grain of salt since he owns 9.7 M shares.

MAC Macerich Co President Coppola doesn’t throw in the towel on this mall based REIT and buys 70,000 at $5.88. MAC is now paying its dividend in stock. I think malls may come back hard, so sick of this self isolation. I hope not to buy anything online again in my lifetime. Just kidding.

SHO Sunshine Hotel Investors CEO Arabia bought 500,000 at $8.69

Monday March 30th, 2020

BAX Baxter International VP Martin buys 9,780 at $82.19. Baxter is a giant integrated health care and pharmaceutical company whose businesses could benefit from increase healthcare spending.

MG Mistras Group Two insiders bought $233.5 K and $396.3k  This might be interesting. Our asset protection portfolio includes field and laboratory inspections & testing; engineering services for asset integrity management; maintenance and light mechanical services. Data from these solutions is centralized in MISTRAS’ world-class inspection data management software – PCMS™ – to provide our clients with integrated, comprehensive asset protection from a single provider.

Friday March 27th, 2020

CLM Cornerstone Strategy Dir Morris bought 30,300 at $8.25

GMS GMS Inc Dir Ross bought 59,221 at $16.25

ET Energy Transfer LP bought 120,000 at $4.89

SIG Signet Jewelers Officer bought 35,000 at $8.53

HHC Howard Hughes CEO bought 4,040 at $50.01.  Ackman bought $500 M at $50 for his hedge fund that cut its teeth on HHC.  Dir Tighe joins the group with a 10,109 purchase at $49.48. With lots of retail related developments and new offices buildings, it seems vulnerable to us.

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

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