Curious how well insiders are doing with their buys? Click on this link or image above to scroll the significant buys of the last year.

Infinite multiples and the greater fool theory are showing cracks in the foundation of relative valuation yet the major indices staged a remarkable comeback up 3.82% while insiders nearly doubled that with the average return up 3.82%. A closer inspection though showed the naked underbelly of this market. Momentum favorites are coming under attack and insiders are making a futile attempt to turn the tide. DocuSign and Paypal insiders are nibbling but this won’t likely change the motion of the tide rolling out.  Momentum investors are under attack.

This and all reports should be viewed as a continual work in progress, more like a notebook than a newsletter. Check back frequently for updates.

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Name: Lores Enrique
Position: Director
Transaction Date: 2021-12-07 Shares Bought: 2,770 Average Price Paid: $180.08 Cost: $498,822
Company: PayPal Holdings Inc. (PYPL)
PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in the majority of countries that support online money transfers and serves as an electronic alternative to traditional paper methods such as checks and money orders. The company operates as a payment processor for online vendors, auction sites, and many other commercial users, for which it charges a fee. The Company’s combined payment solutions, including its PayPal, PayPal Credit, Braintree, Venmo, Xoom, iZettle, and Hyperwallet products and services, comprise its Payments Platform. It operates a two-sided network that links its customers around the globe to facilitate the processing of payment transactions, allowing it to connect merchants and consumers. The Company allows its customers to use their account for both purchases and paying for goods, as well as to transfer and withdraw funds. It enables consumers to exchange funds with merchants using funding sources, which include bank account, PayPal account balance, PayPal Credit account, credit and debit card, or other stored value products. The Company also offers consumers person-to-person (P2P) payment solutions through its PayPal Website and mobile application, Venmo, and Xoom.

Enrique Lores has served as a director of PayPal since June 2021. Since November 2019, he has served as President and Chief Executive Officer of HP Inc., and as a director on the company’s Board of Directors. In his over 30-year career with HP, Mr. Lores has held numerous senior leadership positions, including President of HP’s Imaging, Printing and Solutions business, Senior Vice President and General Manager of HP’s Commercial PC business, Senior Vice President of Worldwide Customer Support and Services, and Senior Vice President of Worldwide Sales and Solutions. He was a key architect of the separation of Hewlett-Packard Company in 2015, leading HP’s separation management office. Mr. Lores serves on the Board of Directors of Silicon Valley Leadership Group and ESADE Business School. Mr. Lores received his B.S. in electrical engineering from the Polytechnic University of Valencia and his M.B.A. from ESADE Business School.

Opinion: Paypal stock is in freefall. The second large purchase in a week may start the path toward rebuilding confidence. After reporting the first sequential revenue decline in its history, the Company stunned the investment community with the revelation that the Board was considering the purchase of 2nd tier e-commerce company, Pinterest. Overnight the market universally questioned the judgment of the Company that built the Paypal juggernaut. Paypal once heralded as a disruption in Fintech, now looked like it might be desperate and be disrupted itself by the new world of Defi and cryptocurrency.

And that’s the problem with overvalued stocks.  It’s all perception and now no one really has confidence in what they think Paypal is worth. Is Paypal worth 45x earnings and 45 x free cash flow if Defi and cryptocurrency could disrupt the disruptor? Is Paypal on sale or is the fence around the fintech giant crumbling.  We don’t know the answer to this.  We nibbled at the name but its certainly not a back up the truck buy with a PEG ratio of 2.2

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Name: Erickson John R
Position: Head of Affiliate Engagement
Transaction Date: 2021-12-06 Shares Bought: 3,000 Average Price Paid: $169.95 Cost: $509,850
Company: Affiliated Managers Group Inc. (AMG)
Affiliated Managers Group, Inc. is an American international investment management company headquartered in West Palm Beach, Florida. that owns stakes in several boutique asset management, hedge fund, and specialized private equity firms. Through its affiliates, affiliated Managers Group, Inc. operates as an asset management company providing investment management services to mutual funds, institutional clients, and high net worth individuals in the United States. It provides advisory or sub-advisory services to mutual funds. These funds are distributed to retail and institutional clients directly and through intermediaries, including independent investment advisors, retirement plan sponsors broker-dealers, major fund marketplaces, and bank trust departments. The company also offers investment products in various investment styles in the institutional distribution channel, including small, small/mid, mid, and large-capitalization value and growth equity, and emerging markets. In addition, it offers quantitative, alternative, and fixed income products and manages assets for foundations and endowments, defined benefits, and defined contribution plans for corporations and municipalities. Affiliated Managers Group provides investment management or customized investment counseling and fiduciary services. The company was formed as a corporation under the laws of Delaware in 1993. Affiliated Managers Group is based in Prides Crossing, Massachusetts. They identify and partner with investment firms around the world specializing in actively-managed investment strategies. The AMG Partnership Approach preserves each Affiliate’s essential elements of success, including operational and investment autonomy and direct equity ownership across successive generations of management, and provides access to the scale and resources of a global asset management firm.

John Erickson is Co-Head of Affiliate Engagement, working with Affiliates on strategic matters. Prior to joining AMG in 2014, Mr. Erickson worked as an investment banker at Merrill Lynch for 15 years, most recently serving as a managing director in the Financial Institutions Group where he advised asset management clients on M&A and capital raising. Mr. Erickson received a B.A. in Economics cum laude from Middlebury College and an M.B.A. from Northwestern University’s Kellogg School of Management. 

Opinion: AMG is a bargain. This pullback is a good opportunity to get in.  Trading at 8x earnings and over 5 x free cash flow AMG is a prize in a market that is grossly overpriced.  AMG’s earnings are highly correlated to the market but its core investment management business is a stable money maker.

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Name: Springer Daniel D
Position: CEO
Transaction Date: 2021-12-07 Shares Bought: 33,675 Average Price Paid: $143.95 Cost: $4,847,368
Company: Docusign Inc. (DOCU)
DocuSign, Inc. provides cloud-based software in the United States and internationally. The company provides an e-signature solution that enables businesses to digitally prepare, sign, act on, and manage agreements. It also offers CLM, which automates workflows across the entire agreement process; Insights that use artificial intelligence (AI) to search and analyze agreements by legal concepts and clauses; Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce; Negotiate for Salesforce that supports for approvals, document comparisons, and version control; Analyzer, which helps customers understand what they’re signing before they sign it; and CLM+ that provide AI-driven contract lifecycle management. The company provides Guided Forms, which enable complex forms to be filled via an interactive and step-by-step process; Click that supports no-signature-required agreements for standard terms and consents; Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Payments that enables customers to collect signatures and payment; and eNotary, which offers the ability to execute electronic notarial acts. It offers industry-specific cloud offerings, including Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally; Rooms for Mortgage, which offers digital workspace to create and close mortgages; FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct, partner-assisted, and Web-based sales. It serves enterprises, commercial, and small businesses. The company was incorporated in 2003 and is headquartered in San Francisco, California.

Daniel D. Springer serves as President, Chief Executive Officer, Director of the Company. He has served as our Chief Executive Officer, President, and member of the Board since January 2017. From May 2015 to January 2017, he served as an Operating Partner at Advent International Corp., a private equity investment firm. From March 2004 to March 2014, Mr. Springer served as Chairman and Chief Executive Officer of Responsys, Inc. (NASDAQ: MKTG), a marketing software company that was acquired by Oracle Corp. in 2014. Prior to joining Responsys, Inc., Mr. Springer served as the Managing Director of Modem Media, Inc., a marketing strategy and services firm, the Chief Executive Officer of Telleo, Inc.

Opinion: Docusign is a true disruptor. It created a category and it’s not likely to be overtaken.  The Company reported Q3 revenue $545.5M, consensus $530.67M. They reported Q3 billings $565.2M, up 28% year-over-year. “Q3 revenue growth of 42% year-over-year and operating margin of 22% exceeded our expectations. After six quarters of accelerated growth, we saw customers return to more normalized buying patterns, resulting in 28% year-over-year billings growth,” said Dan Springer, CEO of DocuSign.

Analysts fell all over themselves downgrading the stock for missing its own target of 34% revenue growth it had shared earlier. The stock lost 40% of its value. With a forward PE of over 60, Docusign is far from rationally priced.  True disruptors rarely are. My hunch is that Docusign has a lot more leverage in its earings than it has historically exercised. It’s likely that investors will see it after the CEO purchased $5 million of company stock. I wouldn’t be surprised to see hiring slowed down and SGA rationalized better.

 

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Name: Doyle J Patrick
Position: Director
Transaction Date: 2021-12-03  Shares Bought: 20,000 Average Price Paid: $104.47 Cost: $2,089,400
Company: Best Buy Co Inc. (BBY)
Best Buy Co., Inc. retails technology products in the United States and Canada. The company operates in two segments, Domestic and International. Its stores provide computing and mobile phones, such as computing covering desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions, networking products, tablets covering e-readers, and wearables, such as smartwatches; and consumer electronics consisting of digital imaging, health and fitness, home theater, portable audio comprising headphones and portable speakers, and smart home products. The company’s stores also offer appliances, such as dishwashers, laundry appliances, ovens, refrigerators, blenders, coffee makers, and vacuums; entertainment products consisting of drones, peripherals, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as beverages, snacks, and sundry items, as well as baby products, furniture, luggage, and sporting goods. In addition, it provides consultation, delivery, design, installation, memberships, protection plans, repair, set-up, and technical support services, as well as connected health services for aging consumers. The company offers its products through .stores and websites under the BestBuy, Best Buy Business, Best Buy Express, Best Buy Health, CST, Geek Squad, GreatCall, Lively, Magnolia, Pacific Kitchen, and Home, as well as the domain names bestbuy.com and greatcall.com. As of January 30, 2021, it had 1,126 large-format and 33 small-format stores. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was incorporated in 1966 and is headquartered in Richfield, Minnesota.

Joseph Patrick Doyle is an Independent Director of Best Buy Co. Mr. Doyle has served as Chief Executive Officer of Domino’s Pizza, Inc., the second-largest pizza company in the world, since 2010. Prior to that, he held a variety of other senior leadership roles at Domino’s. Under Mr. Doyle’s leadership, Domino’s has significantly enhanced its multichannel presence, with digital channels now accounting for 60 percent of U.S. orders. That expertise supports Best Buy’s goal of increasing its online market share. Having led remarkable growth and transformation at Domino’s, Mr. Doyle’s experience and insights are valuable to the Board and senior management as Best Buy undertakes a similar effort. Under Mr. Doyle, Domino’s rebuilt its reputation among consumers and nearly doubled its global retail sales from $5.5 billion in 2008 to $10.9 billion in 2016.

Opinion: The market erased Best Buy shareholders’ profits and it’s now flat for the year. This is not a market that appreciates reasonably priced companies.  Best Buy has a 2.8% dividend and a reasonable multiple of 10x earnings with a stable place in the market. Director Doyle understands value investing. We are buyers of Best Buy but don’t expect any big gains anytime soon. This is how you make 8-12% in a year and keep pace with inflation without losing your shirt speculating on infinite multiple growth stocks.

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Name: Wilder C John
Position: Director
Transaction Date: 2021-12-09  Shares Bought: 13,530 Average Price Paid: $66.77 Cost: $903,395

Name: Wilder C John
Position: Director
Transaction Date: 2021-12-07  Shares Bought: 20,877 Average Price Paid: $65.96 Cost: $1,377,056
Company: Evergy Inc. (EVRG)
Evergy is an American investor-owned utility (IOU) with publicly traded stock headquarters in Topeka, Kansas, and in Kansas City, Missouri. The company was formed from a merger of Westar Energy of Topeka and Great Plains Energy of Kansas City, Missouri, the parent company of Kansas City Power & Light. Evergy is the largest electric company in Kansas, serving more than 1.6 million residential, commercial, and industrial customers in the state’s eastern half. Evergy has a generating capacity of 16,000-megawatt electricity from its over 40 power plants in Kansas and Missouri. Evergy service territory covers 28,130 square miles (72,900 km2) in eastern Kansas and western Missouri. Evergy owns more than 13,700 miles (22,000 km) of transmission lines and about 52,000 miles of distribution lines. Evergy is committed to delivering clean, safe, reliable energy sources today and well into the future. So they’re embracing alternative energy sources to generate more power with less impact on our environment and adopting new technologies that let their customers manage their energy use in ways that work for them. Whether it’s new ways to connect with them, electric vehicle charging stations, or the next innovation around the corner, they’re dedicated to empowering a better future. It generates electricity through coal, hydroelectric, landfill gas, uranium, natural gas, oil sources, and solar, wind, and other renewable sources. The company has approximately 10,100 circuit miles of transmission lines, 39,800 circuit miles of overhead distribution lines, and 13,000 circuit miles of underground distribution lines. It serves approximately 1,620,400 customers, including residences, commercial firms, industrials, municipalities, and other electric utilities.

Mr. Wilder is the Executive Chairman of Bluescape. He serves on the boards of directors of several private portfolio companies and has previously served on the board of many private and public companies, including NRG Energy, Inc. and TXU Corp. He served in executive officer roles in TXU Corp., Entergy Corp., and Royal Dutch/Shell Group. Mr. Wilder received his bachelor of science in business administration from Southeast Missouri State University and holds a master of business administration from the University of Texas.

Opinion: We post just about every week about $EVRG. Regulated electric utility stocks are sitting at the crux of a revolution, a giant transfer of money from the fossil fuel industry into the coffers of electric utilities as the world transitions to EV vehicles. Wilder is part of a group including activist Elliot Management that has been accumulating a large stake in the utility.

 

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Name: Norrington Lorrie M
Position: Director
Transaction Date: 2021-12-06 Shares Bought: 3,733 Average Price Paid: $66.51 Cost: $248,282
Company: Asana Inc. (ASAN)
Asana is a web and mobile application designed to help teams organize, track, and manage their work. Forrester, Inc. reports that “Asana simplifies team-based work management. Asana helps teams orchestrate their work, from small projects to strategic initiatives. Headquartered in San Francisco, CA, Asana has more than 100,000 paying customers and millions of free organizations across 190 countries. Global customers such as Amazon, Japan Airlines, Sky, and Under Armour rely on Asana to manage everything from company objectives to digital transformation to product launches and marketing campaigns. Asana, Inc. offers a work management platform. The Company’s platform enables teams to orchestrate work, from daily tasks to cross-functional strategic initiatives. With its solution, Asana enables individuals to manage and prioritize across each of the projects. Its solution enables individuals to collaborate with teammates and have visibility into each team member’s responsibilities and progress. The Asana solution aids the team leads to manage work across a portfolio of projects or processes. The Company enables executives to communicate company-wide goals, monitor status, and oversee work across projects to gain real-time insights into which initiatives are on track or at risk. Asana is powered by its multidimensional data model called the work graph. The work graph captures and associates work units, the people responsible for executing those units of work, the processes in which work gets done, information about that work, and the relationships across and within the data.

Lorrie Norrington has served as a member of our board of directors since July 2019 and as our lead independent director since August 2021. Ms. Norrington has served as an operating partner of Lead Edge Capital LLC, a growth equity investment firm, since October 2012. Ms. Norrington previously served in several senior management roles at eBay Inc., a multinational e-commerce publicly traded company, from June 2005 to September 2010, including President of Global eBay Marketplaces, Chief Operating Officer of eBay Marketplaces, and President of eBay International. Ms. Norrington currently serves on the boards of directors of Autodesk, Inc., HubSpot, Inc., and Colgate-Palmolive Company, and she also previously served on the boards of directors of Eventbrite, Inc. from April 2015 to August 2020 and of DirectTV from February 2011 to August 2015.

Opinion: Not even an insane amount of buying by founder Moskovitz is arresting the slide in overpriced Asana. We’ve been blogging about Asana for weeks.  At some price ASAN makes sense. Maybe in time, it will be back below the IPO price in the mid $30s. You can tell something has shifted in public sentiment as normally insider buying will provoke a bounce in a stock’s price. Not ASAN anymore. The gig is up. We know. We bought some thinking it would bounce. It hasn’t. Fortunately it was a small bet and we still are holding out a little hope.

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Name: Hamm Harold
Position: Director 10% Owner
Transaction Date: 2021-12-03 Shares Bought: 117,020 Average Price Paid: $43.33 Cost: $5,070,746
Company: Continental Resources Inc. (CLR)
Continental Resources (NYSE: CLR) is a Top 10 independent oil producer in the U.S. Lower 48 and a leader in America’s energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and one of the largest producers in the nation’s premier oil field, the Bakken of North Dakota and Montana. The Company also has leading positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the STACK and Northwest Cana plays. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and our nation’s leadership in the new world oil market. Continental Resources, Inc. explores for, develops, and produces crude oil and natural gas primarily in the north, south, and east regions of the United States. The company sells its crude oil and natural gas production to energy marketing companies, crude oil refining companies, and natural gas gathering and processing companies. As of December 31, 2020, its proved reserves were 1,104 million barrels of crude oil equivalent (MMBoe) with proved developed reserves of 627 MMBoe.

Growing up in rural Oklahoma, Mr. Hamm went to work in the oil fields as a teenager and established Continental Resources in 1967 at the age of 21. He built a grassroots startup into an NYSE-traded, Top 10 oil producer in the U.S. Lower 48. As a voice for America’s oil and natural gas industry and as the leader of one of America’s top E&P companies, he has helped to make America energy independent. Mr.Hamm also co-founded and serves as Chairman of the Domestic Energy Producers Alliance, which aims to preserve the millions of jobs and billions of dollars in economic activity and tax revenues generated by onshore drilling and production activities within the United States. Through his work with DEPA, Mr. Hamm is widely recognized as the man who led the charge to lift America’s 40-year-old ban on U.S. crude oil exports.

Opinion: There is something smelly here. I’ve blogged about this before.  Hamm has bought hundreds of millions of CLR stock.  Where does he get the money? He’s never sold anything like the quantity of stock he’s purchased.

 

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Name: Silcock Raymond
Position: CFO
Transaction Date: 2021-12-03 Shares Bought: 27,500 Average Price Paid: $36.03 Cost: $990,930
Company: Perrigo Co Plc. (PRGO)
Perrigo Company plc provides over-the-counter (OTC) health and wellness solutions that enhance individual well-being by empowering consumers to prevent or treat conditions that can be self-managed. The company operates through Consumer Self-Care Americas, Consumer Self-Care International, and Prescription Pharmaceuticals segments. The Consumer Self-Care Americas segment focuses primarily on the development, manufacture, marketing, and sale of store brand, self-care products in categories, including upper respiratory, pain and sleep-aids, digestive health, nutrition, vitamins, minerals and supplements, healthy lifestyle, skincare, and personal hygiene, and oral self-care in the United States, Mexico, Canada, and South America. The segment offers its products under the brand names of Prevacid 24HR, Good Sense, Zephrex D, ScarAway, Plackers, Rembrandt, Steripod, Firefly, REACH, and Dr. Fresh. The Consumer Self-Care International segment develops, manufactures, markets, and distributes consumer self-care brands through a network of pharmacies, wholesalers, drug and grocery store retailers, and para-pharmacies in approximately 30 countries, primarily in Europe. The Prescription Pharmaceuticals segment develops, manufactures, and markets a portfolio of generic prescription drugs, such as creams, ointments, lotions, gels, shampoos, foams, suppositories, sprays, liquids, suspensions, solutions, controlled substances, injectable, hormones, oral solid dosage forms, and oral liquid formulations in the United States, as well as pharmaceutical and diagnostic products in Israel. In addition, it offers contract manufacturing services. Perrigo Company plc was founded in 1887 and is headquartered in Dublin, Ireland.

Mr. Silcock was appointed Executive Vice President and Chief Financial Officer in March 2019. Mr. Silcock previously served as CFO at INW Holdings, a contract packer of vitamins, minerals, and supplements. He also held CFO roles for more than 20 years at both public and private equity-held companies, including CTI Foods, Inc., Diamond Foods Inc., UST, Inc., Swift & Co., and Cott Corporation. Mr. Silcock served on the Board of Directors of Pinnacle Foods Inc. for more than ten years until its sale to Conagra in 2018. His early career was highlighted by an 18-year tenure in positions of increasing responsibility at Campbell Soup Company. Mr. Silcock is a Fellow of the Chartered Institute of Cost & Management Accountants.

Opinion: This is a large purchase by our favorite insider, the Chief Financial Officer. I don’t know what though that will make Perrigo a good investment again. After rising almost steadily from 2010 until 2017, it’s been on a steady slide roundtripping to where it started 10 plus years ago.

 

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Name: Sheehan Kevin M
Position: Director
Transaction Date: 2021-12-09  Shares Bought: 15,000 Average Price Paid: $34.92 Cost: $523,758
Company: Dave & Buster’s Entertainment Inc. (PLAY)
Dave & Buster’s Entertainment, Inc. owns and operates entertainment and dining venues for adults and families in North America. Its venues offer a menu of entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under Dave & Buster’s name. As of January 31, 2021, it owned and operated 140 stores located in 40 states, Puerto Rico, and one Canadian Province. The company was founded in 1982 and is headquartered in Dallas, Texas. At Dave & Buster’s you can play hundreds of the hottest new arcade games in our Million Dollar Midway and win tickets for epic prizes. You want to work here. Try their mouth-watering, chef-crafted creations in their American restaurant. From wings to steaks, they’ve got whatever suits your appetite. Their premium bar features innovative cocktails, an impressive wine selection, and 20+ beers to assure they’re stocked to satisfy! Watch their team on one of their massive HDTVs with epic stadium sound that surrounds you from every direction in the sports bar that crushes the competition. Invite all your friends or coworkers for an unforgettable party or event! they work with every size and budget to make planning easy so you can focus on the FUN! Work here! To deliver an unparalleled guest experience through the best combination of food, drinks, and games in an ideal environment for celebrating all-out fun.

Kevin M. Sheehan has been Interim CEO since October 2021 and has served as Chair of the Dave & Buster’s Board since April 2021 and as a Director since October 2011. He previously served as the President and Chief Executive Officer of Scientific Games Corporation from August 2016 until June 2018. Mr. Sheehan served as Chief Executive Officer of NCL Corporation Ltd., a leading global cruise line operator (“Norwegian”), from November 2008 through January 2015, and added the role of President from August 2010 through January 2015. Before joining Norwegian, Mr. Sheehan was a consultant to private equity firms including Cerberus Capital Management LP and Clayton Dubilier & Rice. Prior to that, 

Opinion: This looks like a private equity take-out candidate. The company was in talks before to go private. I think the question is what kind of premium could the company get. I don’t suspect it would be much.

 

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Name: Lynch Brian P
Position: CFO
Transaction Date: 2021-12-02 Shares Bought: 15,000 Average Price Paid: $25.79 Cost: $386,900

Name: Brewer Oliver G
Position: CEO
Transaction Date: 2021-12-02 Shares Bought: 4,000 Average Price Paid: $25.55 Cost: $102,199
Company: Callaway Golf Co. (ELY)
Callaway Golf Company, together with its subsidiaries, designs, manufactures and sells golf clubs and golf balls, apparel, gear, and other products. It operates through two segments, Golf Equipment; and Apparel, Gear, and Other. The Golf Equipment segment provides drivers, fairway woods, hybrids, irons, wedges, and packaged sets, putters, and pre-owned golf clubs under the Callaway and Odyssey brands, as well as golf balls under the Callaway Golf and Strata brand names. The Apparel, Gear, and Other segment offer golf apparel and footwear; golf accessories, including golf bags, golf gloves, headwear, and practice aids under the Callaway brand; and golf and lifestyle apparel, hats, luggage and accessories, footwear, belts, hats, socks, and underwear under the TravisMathew brand name. This segment also provides storage gear for sport and personal use, including backpacks; travel, duffel, and golf bags; and storage gear accessories, as well as outerwear, headwear, and accessories under the OGIO brand. In addition, it offers outdoor apparel, such as jackets, trousers, and tops; and footwear, and outdoor equipment, including packs and bags, travel bags, tents, sleeping bags, and accessories. The company sells its products through golf retailers, sporting goods retailers, mass merchants, Internet retailers, department stores, field representatives, online retailers, mail order stores, and in-house sales representatives, as well as to third-party distributors in the United States and approximately 100 countries. It also offers pre-owned golf products through its Website callawaygolfpreowned.com; and OGIO and TravisMathew products through its Websites callawaygolf.com, odysseygolf.com, ogio.com, and travismathew.com. The company was incorporated in 1982 and is headquartered in Carlsbad, California.

Brian Lynch is the Executive Vice President and Chief Financial Officer of the Company and has served in this role since January 2019. Prior to his current position, he served as the Company’s Senior Vice President, General Counsel, and Corporate Secretary since June 2012, before being appointed the additional role of Interim Chief Financial Officer in April 2017 and Chief Financial Officer in July 2017. He is responsible for the Company’s finance, legal, IT, corporate governance, and compliance functions. Mr. Lynch also formerly served as the Company’s Chief Ethics Officer. Mr. Lynch first joined Callaway in December 1999 as Senior Corporate Counsel and was appointed Associate General Counsel and Assistant Secretary in April 2005 and Vice President and Corporate Secretary in November 2008. He has over 30 years of experience handling legal, strategic, operational, and administrative matters for public and private entities.

Oliver G. “Chip” Brewer III has served as a Director and the President and Chief Executive Officer of Callaway Golf since joining the Company in March of 2012. Mr. Brewer oversees all areas of the Company, and under his leadership, Callaway has become an industry leader in equipment sales, advanced technologies, and product performance. Since 2012, he has also served as Director of TopGolf International, Inc, in which Callaway Golf Company has a minority ownership interest. He was the President and Chief Executive Officer of Adams Golf from January 2002 to February 2012. Mr. Brewer currently serves on the Board of the National Golf Foundation as well. He is a 1986 graduate of the College of William and Mary, and he received his MBA from Harvard University in 1991.

Opinion: According to  Brewer “Callaway’s third quarter performance highlights the significant growth and profitability embedded in our business, as all segments have recovered more quickly than we anticipated and are delivering results ahead of plan,” commented Chip Brewer, President and Chief Executive Officer of Callaway. “Our golf equipment and apparel businesses are benefiting from sustained enthusiasm for the sport of golf and outdoor exploration, while Topgolf’s fun, inclusive, social environment is in high demand among customers of all skill levels and ages. This powerful combination of off-course and on-course golf, entertainment, dining and outdoor living is unlike any other company in the market today and is poised for long-term growth as we continue to execute our strategy. We are committed to driving value for our shareholders and believe our brands are well-positioned to deliver sustainable, long-term growth as we look ahead to 2022 and beyond.”

 

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Name: Daily Gregory S
Position: CEO 10% Owner
Transaction Date: 2021-12-02 Shares Bought: 82,087 Average Price Paid: $18.77 Cost: $1,540,725
Company: i3 Verticals Inc. (IIIV)
i3 Verticals, Inc. provides integrated payment and software solutions to small- and medium-sized businesses and organizations in education, non-profit, public sector, and healthcare markets in the United States. It operates in two segments, Merchant Services, and Proprietary Software and Payments. The company offers payment processing services that enable clients to accept electronic payments, facilitating the exchange of funds and transaction data between clients, financial institutions, and payment networks. The company also licenses software; and provides ongoing support, and other point sale-related solutions. It offers its solutions to clients through a direct sales force; distribution partners, including independent software vendors, value-added resellers, and independent sales organizations; and referral partners, such as financial institutions, trade associations, chambers of commerce, and card issuers. The company was founded in 2012 and is headquartered in Nashville, Tennessee.

Greg Daily is the Chief Executive Officer and Chairman of the Board of Directors. Before founding i3 Verticals, Mr. Daily founded iPayment, Inc. (Nasdaq: IPMT) in 2001 and served as its Chairman and Chief Executive Officer until his departure in 2011. In 1984, Mr. Daily co-founded PMT Services, Inc. (Nasdaq: PMTS), a credit card processing company, and served as its President until the company was sold in 1998 to NOVA Corporation, where he continued to serve as Vice Chairman of the board of directors until 2001. Mr. Daily holds a Bachelor of Arts from Trevecca Nazarene University.

Opinion: Payment plays have been hot. Not this one though but a $1.5M buy may signal a turn in the direction for this falling knife. The company makes reasonable money but the Pandemic took its toll and revenue is now approaching pre-pandemic levels.Reports Q4 revenue $67.2M, consensus $64.29M. Greg Daily, Chairman and CEO of i3 Verticals, commented, “We are very pleased to deliver another quarter of sequential and year-over-year growth with new records in revenue and adjusted EBITDA. Our vision has been to grow into a vertical market software company that focuses on embedded payment opportunities. Our results highlight consistent execution of this vision as software and related services revenue has grown to 42% of our total revenue and our integrated payments now represent 63% of our total payment volume.”


Opinion:
Name: Rankin Aubrey
Position: President
Transaction Date: 2021-12-03 Shares Bought: 30,000 Average Price Paid: $14.43 Cost: $432,876
Company: Revance Therapeutics Inc. (RVNC)
Revance Therapeutics, Inc., a biotechnology company, engages in developing, manufacturing, and commercializing neuromodulators for various aesthetic and therapeutic indications in the United States and internationally. The company’s lead drug candidate is DaxibotulinumtoxinA for injection (DAXI), which has completed phase III clinical trials for the treatment of glabellar (frown) lines and cervical dystonia; is in phase II clinical trials to treat upper facial lines, moderate or severe dynamic forehead lines, and moderate or severe lateral canthal lines; and has completed Phase II clinical trials for the treatment of adult upper limb spasticity and plantar fasciitis. It is also developing DAXI in preclinical trials for the treatment of migraine and a topical program for various indications, and OnabotulinumtoxinA, a biosimilar to BOTOX. The company has a collaboration and license agreement with Viatris Inc. to develop and regulate biosimilar to BOTOX. The company was formerly known as Essentia Biosystems, Inc. and changed its name to Revance Therapeutics, Inc. in April 2005. Revance Therapeutics, Inc. was incorporated in 1999 and is headquartered in Newark, California. Founded in Silicon Valley 20 years ago, Revance fuses cutting-edge science with an ingrained entrepreneurial spirit to transform patient and physician experiences. They have a team of motivated, talented professionals across the U.S. who collectively aim to transform patient experiences and disrupt the status quo. Exceptional talents with passion, creativity, and dedication to improving lives will immediately contribute to their ambitious pipeline and unique culture. Their employees work on challenging projects in a supportive environment that provides opportunities for growth and development. They celebrate and embrace differences for the success of their business, their employees, and their community. Revance is proud to be an Equal Opportunity Employer. Revance recognizes that its employees are the key to their success.

Aubrey Rankin joined Revance Therapeutics in 2020 as President of Innovation & Technology and as a member of Revance’s board of directors. Previously, Mr. Rankin was the co-founder & CEO of HintMD, a fintech platform developed specifically for medical aesthetic practices; which was acquired by Revance Therapeutics in 2020. Prior to co-founding HintMD, Mr. Rankin served as Vice President of Asia-Pacific at ZELTIQ Aesthetics (ZLTQ). During his tenure, he led accelerated growth in the Asia-Pacific region and was part of a larger management team responsible for one of the most successful business turn-around efforts within the medical aesthetics industry.

Opinion: Boom- that’s the binary outcome of biotech. October 15th Revance announced that the FDA has issued a complete response letter, or CRL, regarding the biologics license application, or BLA, for DaxibotulinumtoxinA for injection, for the treatment of moderate to severe glabellar lines. In a communication received on October 15, the FDA has determined it is unable to approve the BLA in its present form and indicated that there are deficiencies related to the FDA’s onsite inspection at Revance’s manufacturing facility. Revance plans to request a Type A meeting with the FDA as soon as possible to address the deficiencies raised. No other deficiencies were identified in the CRL.

Apparently, Rankin feels there is promise that the approval can still come.

 

Finviz Chart

Name: Hernandez Marlow
Position: CEO
Transaction Date: 2021-12-01  Shares Bought: 12,500 Average Price Paid: $8.75 Cost: $109,375

Name: Hernandez Marlow
Position: CEO
Transaction Date: 2021-12-06  Shares Bought: 15,000 Average Price Paid: $8.00 Cost: $120,000
Company: Cano Health Inc. (CANO)
Cano Health, Inc. provides primary care medical services to its members in the United States and Puerto Rico. It owns and operates medical centers enabled by CanoPanorama, a proprietary population health management technology-powered platform that provides the healthcare providers at its medical centers with a 360-degree view of their members with actionable insights to improve care decisions and member engagement. The company also operates pharmacies, as well as provides dental services in its medical centers. As of July 2, 2021, it operated 106 owned medical centers and approximately 800 affiliate providers serving approximately 197,000 members. The company was founded in 2009 and is based in Miami, Florida. Their mission is to improve patient health by delivering superior primary care medical services while forging a life-long bond with their members. Their vision is to become the national leader in primary care by improving the health, wellness, and quality of life of the communities we serve while reducing health care costs. They focus relentlessly on enhancing patient well-being. They show empathy and treat patients like family. They know that they are all responsible for delivering world-class services. They provide state-of-the-art primary care medicine and personalized patient care, to deliver a proactive approach to wellness and preventive care. They focus on enhancing patient well-being.

Dr. Marlow Hernandez is the Chief Executive Officer of Cano Health and serves on its Board of Directors. Under Hernandez’s leadership, Cano Health has become one of the fastest-growing and most respected healthcare companies in Florida abiding by cultural attributes, which stand on the principles of always placing the needs of patients above all else; while striving to create a better and sustainable health care model to improve the lives of all Americans. Hernandez began practicing medicine in Pembroke Pines, FL alongside his family’s dental practice. Practicing medicine, running the medical business, while also taking on the task of night and weekend duties at local hospitals, Hernandez became one of the most accomplished medical professionals in the state before reaching the age of 30.

Opinion: We’ve blogged about this name before. We like it. We don’t like SPACSs though. It’s really not a good vehicle to bring a company public if you have such a weak shareholder base that is dying to get out of their shares.  Companies need stable long-term investors for the stock to work.

 

Finviz Chart

Name: Samaha Eli
Position: Director
Transaction Date: 2021-12-03 Shares Bought: 292,961 Average Price Paid: $8.14 Cost: $2,383,930
Company: Stagwell Inc. (STGW)
Stagwell Inc. provides marketing, advertising, activation, communications, and strategic consulting solutions in the United States, Canada, and internationally. It offers global advertising and marketing, data analytics and insights, mobile and technology experiences, direct marketing, business consulting, database and customer relationship management, sales promotion, corporate communications, market research, social media strategy and communications, product and service innovation, and e-commerce management services; corporate identity, design, and branding services; and media buying, planning, and optimization services. The company was formerly known as MDC Partners Inc. and changed its name to Stagwell Inc. in August 2021. Stagwell Inc. was founded in 1980 and is headquartered in New York, New York. They are a digital-first global marketing network that delivers scalable, seamless solutions through a unique combination of culture-moving creativity and leading-edge technology. They believe the marketplace demands new kinds of marketing companies that combine in-depth data, insightful analytics and a complete understanding of the digital landscape. Their global network of forward-thinking agencies empowers them to think bigger, adapt faster, and provide greater value for the world’s most ambitious brands.

Eli Samaha is the Founder and Managing Partner of Madison Avenue Partners, LP, a value-focused investment manager whose partners include leading university endowments, hospital systems, and philanthropic foundations. Prior to founding Madison, Mr. Samaha was a Partner at Newtyn Management and held roles at KPS Capital Partners and GSC Group. He received a bachelor’s degree in Mathematics from Dartmouth College.

Opinion: Stagwell is basically a roll-up of ad agencies. Nice looking chart, though.

 

Name: Hurlbert Craig M
Position: CEO
Transaction Date: 2021-12-02 Shares Bought: 112,107 Average Price Paid: $6.82 Cost: $765,013

Name: McKinney Mark Alan
Position: COO
Transaction Date: 2021-12-02 Shares Bought: 46,455 Average Price Paid: $6.68 Cost: $310,087

Name: Valiasek Kathleen
Position: CFO
Transaction Date: 2021-12-02 Shares Bought: 15,746 Average Price Paid: $6.35 Cost: $100,000
Company: Local Bounti Corporation. (LOCL)
Local Bounti is a premier controlled environment agriculture (CEA) company redefining conversion efficiency and environmental, social, and governance (ESG) standards for indoor agriculture. Local Bounti operates an advanced indoor growing facility in Hamilton, Montana, within a few hours’ drive of its retail and foodservice partners. Reaching retail shelves in record time post-harvest, Local Bounti produce is superior in taste and quality compared to traditional field-grown greens. Local Bounti’s USDA Harmonized Good Agricultural Practices (GAP Plus+) and non-genetically modified organisms (GMO) produce is sustainably grown using proprietary technology 365 days a year, free of pesticides and herbicides, and using 90% less land and 90% less water than conventional outdoor farming methods. With a mission to ‘bring our farm to your kitchen in the fewest food miles possible,’ Local Bounti is disrupting the cultivation and delivery of produce. Local Bounti is also committed to making meaningful connections and giving back to each of the communities it serves. At Local Bounti, they strive to deliver the freshest, locally grown produce in your neighborhood. We sustainably grow fresh greens and herbs 365 days a year in their greenhouses, using 90% less water and 90% less land than conventional agriculture. Perfect environmental greenhouse conditions ensure the highest possible nutritional value and taste. They are non-GMO and pesticide/herbicide-free. Their sustainable, root-on, living products result in less environmental impacts, carbon footprint, and less waste. It’s their goal to bring their farm to your kitchen.

Mr. Hurlbert co-founded Local Bounti Corporation and, since April 1, 2021, has served as Co-Chief Executive Officer at Local Bounti. Mr. Hurlbert is also a co-founder of BrightMark Partners, a growth equity and management firm providing capital and resources to venture, growth phase, and middle-market businesses, and has served as a Managing Partner since January 2014. From December 2000 to April 2020, Mr. Hurlbert served in various leadership roles, including President, Chief Executive Officer, and, most recently from May 2013 to April 2020, as Chairman of the Board of TAS Energy, a leading provider of high efficiency and modular cooling and energy systems for the data center, commercial, industrial and power generation markets. Mr. Hurlbert also held leadership roles at General Electric Company (NYSE: GE) and North American Energy Services.

Mark is a highly experienced executive and a global food industry leader with over 30 years of domestic and international experience with premier food companies such as Sunkist and Dole Food Company. He has more than two decades of executive-level experience in the food industry with a solid track record of achievement. He previously served as COO of Fruit Growers Supply (a cooperative of Sunkist Growers) where he managed six business verticals as well as all supply chain operations to support 39 packinghouse customers and thousands of Sunkist growers. Prior to that, he served as CEO of Al Ghurair Foods, where he managed nine business lines with manufacturing operations in four countries in the Middle East, including the largest poultry operations and flour mills in the UAE.

An entrepreneurial executive, Kathleen brings a 30-year record of driving profitable growth in public and privately held companies from start-ups to Fortune 500 companies, within the biotech, retail, telecommunications, real estate, and healthcare markets. Most recently, Kathleen served as CFO and CBO of Amyris, Inc., a publicly-traded biotech and commercial stage manufacturing company with global operations. She closely partnered with the CEO to expand product offerings in B2B and consumer markets. Kathleen raised over $1B in debt and equity financing while simultaneously reducing debt and attracting institutional investors. As CBO, Kathleen led the strategic market entry into the pharmaceutical industry. During her tenure, Amyris’ market cap grew from $300M to $5B.

Opinion: I’m a little surprised that CFO of Amyris would jump ship for the Local Bounti ride.  This is another SPAC deal that went public in November. I wouldn’t touch it with a 10 ft. pole

 

Finviz Chart

Name: Mali Lincoln Camagu
Position: CEO
Transaction Date: 2021-12-03 Shares Bought: 42,143 Average Price Paid: $5.16 Cost: $217,400
Company: Net 1 Ueps Technologies Inc. (UEPS)
Net 1 UEPS Technologies, Inc., a financial technology company, provides fintech products and services to unbanked and underbanked individuals and small businesses primarily in South Africa and internationally. The company develops payment technologies to offer financial and value-added services to its customers. It operates through three segments: Processing, Financial Services, and Technology. The Processing segment provides transaction processing services that involve the collection, transmittal, and retrieval of all transaction data to its customers. The Financial Services segment includes activities related to the provision of financial services to customers, including bank accounts, loans, and life insurance products. This segment also provides short-term loans to customers. The Technology segment sells hardware, such as point of sale devices, SIM cards, and other consumables; and licenses the right to use certain technology developed by the company, as well as offers related technology services. The company was incorporated in 1997 and is headquartered in Johannesburg, South Africa..

Lincoln C. Mali 53 years old Director since 2021 Mr. Mali has been our Chief Executive Officer: Southern Africa since May 1, 2021. Mr. Mali is a financial services executive with over 25 years in the industry. Until April 2021, he was the Head of Group Card and Payments at Standard Bank Group, having served in many different roles within that organization since 2001. Mr. Mali chaired the board of directors of Diners Club South Africa until April 2021 and was a member of the Central and Eastern Europe, Middle East, and Africa Business Council for Visa. Mr. Mali holds Bachelor of Arts (BA) and Bachelor of Laws (LLB) degrees from Rhodes University, an MBA from Henley Management College, various diplomas, and attended an Advanced Management Program at Harvard Business School.

Opinion: UEPS is lower in price than it was in 2010. How that gets reversed will be a great mystery. I think this is window dressing and this stock will never work for its shareholders.

 


 

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Insiders sell the stock for many reasons, but they generally buy for just one – to make money. You’ve always heard the best information is inside information.  Everyone who has any experience at all in the stock market pays close attention to what insiders are doing.  After all, who knows a business better than the people running it?  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.

We publish a subscription newsletter called The Insiders Report.  We offer a free 30-day trial so you have nothing to lose by trying it out. Be sure to carefully read the TERMS OF SERVICE.

Another source for insider buying and selling and much more is FinViz Elite. FinViz stands for financial visualization and they do an amazing job of providing reams of data and the tools to help you get to the bottom of it, the information that helps me make informed decisions and probable outcomes. I’ve been using their site for years and it only gets better over time.

This is as close to “insider information” that an ordinary investor is likely to see- and it’s entirely legal. 

BEWARE– Following insiders can be hazardous to your financial health unless you know what you are doing.  Unlike the raw, unfiltered data, The Insiders Fund blog informs you of the purchases that count, the ones that are just window dressing into deceiving the public that all is hunky-dory, and those that are just flat out other people’s money and should be just discarded like bad fish. 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 and options. 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. Also planned sales that just pop up out of nowhere are basically sales and are seeking cover under the Sarbanes Oxley corporate welfare clause. 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. Don’t let anyone fool you into believing they never make mistakes.  No one tracks and understands insider behavior better than us. We’ve been doing it religiously since 2001 when I quit being an insider myself and devoted myself full time to managing my personal investments. 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.  THE INSIDERS FUND invests in companies at or near prices that management has been willing to invest significant amounts of their own money in.  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

The Insiders Fund was the 4th best long-short equity fund in the world in 2019