Jazz Pharmaceutical Director Seamus Mulligan bought 50,000 shares at $111.08. Before investors pile in behind that enforcement, it’s worth considering Mulligan bought 50,000 shares back in 11/15/18 at $144.56. JAZZ had a few analyst downgrades after releasing last quarter’s earnings report. JAZZ is a leader in sleep medicine and has a growing hematology/oncology portfolio.

Dynavax Technologies DVAX is a startup biotech.  The priced a 14M share offering at $5 below the last closing price osf $5.66. Director Jack bought 1,000,000 shares at $5. Do you think he knew that DVAX would announce a week letter that Sky would report a collaboration with Sinovac Biotech  and that scientists working at the comany said they are
”99% sure will it will be effective.”  DVAX rockets 26% higher to $6.21 on the news.

New Mountain Finance Corp Chairman Klinksy bought 272,861 shares at $9.15. Klinksy has been buying this middle marketing lending company.  NMFC is yielding 12.63%.

MCY Mercury General Corp 98-year old founder and Chairman George Joseph bought $2.49 Million more of this California based P&C insurer. Joseph is already the controlling shareholder and hasn’t bought stock in decades and is buying now. Is he senile, is there something up here, or is the 6% dividend  yield just a wise use of funds? New car sales are down, premiums are down but claims are down as well as people drive less due to the pandemic.

AHH Amarda Hoffer Properties and Hudson Pacific Properties are both first class mixed use REITS. Director  Snow bought $999,363 of AHH at $7.99.  Director Moran bought 10,000 HPP at $21.37.  These are good buys if you believe we can return to normalcy sooner than later.

Royal Caribbean Cruises RCL insider bought 20,000 shares at $48.63 sparking a sharp rally in shares of the cruise line operator. Incredulously cruise line operators report strong interest in cruises for next year. Everyone loves a deal, even if it might kill you. RCL yields over 6% but I wouldn’t expect this to continue.  This looks like a good speculative buy but keep in mind,  a renewed outbreak of Covid could collapse these heavily indebted company.

TPC Tutor Perini Corp CEO bought $498,000 at $9.96 per share. This is the second insider buy after the discussions collapsed regarding a potential transaction for the acquisition of the Company.

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 SECForm4  as they provide a way to manage and make sense of the vast realms of data. I’ve tried a lot of vendors and SECForm4 is one of the most customer friendly and responsive I’ve used.

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