The monster purchase by Mitchell Rales of 141,20 shares of Danaher Corp DHR at $164.69 represented just 0.4% change in his holdings.  If an insider is doubling his holdings, this likely has more significance than just upping your holdings by 4/10 tenths of a percent, but this was still a monster buy and I wanted to analyze it. Danaher has made the Rales brothers billionaires and it seems they are none to eager to unload it.

Not sure what to make of Director Glazer’s purchase of $1.7 Million of HCHC.  HC2 Holdings is a publicly traded investment vehicle with Philip Falcone at the head.  He is chairman, president and chief executive officer of HC2 Holdings Inc., which owns companies in construction, energy, life sciences, marine services, telecommunications and other industries, according to its website.

UPS United Parcels Service new CEO bought $1 Million worth of stock at $99.33.  We generally dismiss new purchases by newly appointed CEO as they are expected to own substantial stock. In this case, though, we are all in on this one. Carol Tome has been a long time board member. The pandemic has caused an acceleration of the shop at home trend and UPS should be a beneficiary of this.  The stock hasn’t rallied like other stay at home plays.

SIGI Selective Insurance Director Rue bought 25,000 shares at $52.45.  Insurance and banking have been some of the hardest hit stocks from the corornavirus market sell-off. In the last week, though, they are the best performing stocks as the market sniffs out an eventual recovery.  SIGI closed out the week at $57.47.

American Financial Group Director Ambrecht bought 4000 shares at $59.88.  AFG rocketed up to the close the week at $71.53 and still looks like it’s headed higher as it is still quite a ways from its recent high at $113.18.

Klinksy bought 27,139 shares of New Mountain Finance Corp at $9.38. NMFC yields 11.92%

Chairman Bryant Riley bought 40,000 shares of his namesake company, B Riley Financial, at $20.81.  What’s going on at RLY?

ALLO Allogene Therapeutic did a 11.7M share secondary priced at $47 and the Chairman bought 146,382 shares. That’s nice and normally I would pay attention to a $6.8 Million dollar insider purchase but this amount represented just 2.3% of his holdings.  Since ALLO has yet to have any revenue, this biotech needs more money to just to survive.  It’s good to have convictions from insiders as the last time the Chairman bought was 10/15/18 at $18 per share.  Somewhere along the line he cashed out lots of his chips, so what the heck- buy some more at almost three times the price.

HP HPQ reported earnings, fell 10%, got downgraded to neutral at JP Morgan and two insiders bought shares. The largest buy was Director Bennett’s purchase of 67,000 shares at $14.99.  HPQ closed the week out at $17.50. I like this contrarian play.

Perhaps my favorite play of the week was Park Hotels and Resorts. Director Thomas Eckert dipped his toe back in the water with a purchase of 30,000 shares at $10.55. PK closed the week out 30% higher at $13.54.  This might have more room to run.

CEO Elias Sabo bought 55,000 shares of CODI At $17.30.  Compass is a diversified business holding company that recently bolstered its balance sheet with a spot secondary on May 4th at $17.60.  This is the first purchase since a planned purchase last November at $22.32.   Codi yields 7.93% at Friday’s closing price of  $18.15

Office and apartment REIT Douglas Emmett Chairman bought 42,800 at $30.33.  The yield on DEI is 3.36%. This hardly accounts for the risk in getting involved in a pandemic that is changing the fundamentals of the office market.

Director Kennedy bought 122,100 shares at $4.03 in networking company, Extreme Networks, Inc. EXTR could be a long term beneficiary of cloud driven networking although there hasn’t been any evidence of that from their lack of revenue growth.


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