Curious how well insiders are doing with their buys? Scroll the significant buys of the last year.

This is the most meager display of insider buying I’ve ever seen.  Yea, yea it’s the earnings blackout but insiders have no trouble managing to sell during the blackout window using the 10B5-1 loopholes, they could find the motivation to buy if they had any.

 

Finviz Chart

Name: Peek Mark S
Position: Director
Transaction Date: 2022-04-12 Shares Bought: 30,000 Average Price Paid: $34.40 Cost: $1,032,000.00
Company: SentinelOne Inc. (S)
SentinelOne, Inc. is a cybersecurity firm that was previously known as Sentinel Labs, Inc. To allow autonomous cybersecurity defense, the company has developed an artificial intelligence (AI) extended detection and response (XDR) platform. The Singularity Platform protects the company from cyberattacks. Its platform ingests, analyses, and queries petabytes of structured and unstructured data in real-time from a growing number of external and internal sources. Customers can use the Singularity Platform in any environment they want, including public, private, or hybrid clouds. Its capability, which is available for Windows, macOS, Linux, and Kubernetes, provides security, visibility, and control across heterogeneous IT environments. Subscriptions are available for the company’s platform. Singularity Core, Singularity Control, and Singularity Complete are the three subscription tiers available. Its Singularity Platform is hosted on Amazon Web Services (AWS) across North America, Europe, Asia Pacific, and AWS GovCloud.

Mark S. Peek has served as a member of our board of directors since May 2021. Since February 2018, Mr. Peek has served as Executive Vice President, Managing Director, and head of Workday Ventures, the strategic investment arm of Workday, Inc., or Workday. a leading provider of enterprise cloud applications for finance and human resources. From June 2015 to February 2018, Mr. Peek served as Workday’s Co-President and Chief Financial Officer from June 2012 to April 2016. From April 2007 through January 2011, Mr. Peek was President, Business Operations, and Chief Financial Officer of VMware, Inc., a provider of business infrastructure virtualization solutions. Mr. Peek worked for Amazon.com, Inc. as Senior Vice President and Chief Accounting Officer from March 2000 to April 2007. Prior to joining Amazon, Mr. Peek worked for Deloitte for 19 years, the last 10 of which he spent as a partner. Mr. Peek is a member of the Foster School of Business Advisory Board at the University of Washington. From December 2011 to June 2012.

Opinion: Peek is the solitary buyer of this fast-growing internet threat detection company but he is a size buyer. His last buy was for over $1.4 M last December at $48.02. Sentinel has yet to make money but it’s got over $1.4 billion in the bank and is growing like a weed.  Singularity sounds like something amazing. There was even a Sci Thriller named Singularity We are waiting a bit here and watching this one. The security sector is hot but large addressable markets without a clear path to profitability are not.

Finviz Chart

Name: Christensen Christopher R
Position: Director
Transaction Date: 2022-04-12 Shares Bought: 27,332 Average Price Paid: $16.50 Cost: $450,958
Company: Pennant Group Inc. (PNTG)
The Pennant Group, Inc. is a healthcare provider in the United States that serves patients and residents of all ages, including the expanding elderly population. Across Arizona, California, Colorado, Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming, the company runs numerous lines of business, including home health, hospice, and senior living. In its assisted living, independent living, and memory care businesses, it provides home health and hospice services through roughly 88 agencies, as well as senior living services through approximately 54 facilities with approximately 4,127 units. Home health and hospice services, as well as senior living services, are the company’s two segments. Its home health, hospice, and home care companies are included in the home health and hospice services segment. The assisted living, independent living, and memory care complexes are all part of the senior living services category.

Ensign’s Executive Chairman is now Christopher R. Christensen. Mr. Christensen was President of Ensign from 1999 to April 2006, and Chief Executive Officer from April 2006 to May 2019. Since Ensign’s inception in 1999, Mr. Christensen has been a member of the Board of Directors. Mr. Christensen was the interim Chief Operating Officer of Covenant Care, Inc., a long-term care provider based in California, prior to founding Ensign. Since Ensign’s founding in 1999, Mr. Christensen has managed the company’s expansion. Between June 2014 and April 2015, Mr. Christensen served on the CareTrust REIT Board of Directors. Mr. Christensen’s significant involvement in the history and management of Ensign and our company, as well as his leadership and business talents, led us to believe that he should be one of our board of directors.

Opinion: If Pennant were to be a healthcare patient, I’d say it was in hospice by the look of the stock. According to Truist analyst, David MacDonald, underlying demand drivers, and tailwinds look good for the business.  I guess David was brought up the same way I was. If you can’t say anything good about someone, maybe don’t say anything at all.

 

Finviz Chart

Name: Farner Jay
Position: CEO
Transaction Date: 2022-04-11 Shares Bought: 61,500 Average Price Paid: $9.72 Cost: $$597,710.00
Company: Rocket Companies Inc (RKT)
Rocket Companies, Inc. is a holding company with interests in real estate, mortgage lending, and eCommerce. Rocket Platform is a service provided by the company. Direct to Consumer and Partner Network are two of its segments. Performance marketing and direct engagement through its Rocket Mortgage application are part of its Direct to Consumer strategy. Clients in the Direct-to-Consumer segment can connect with the Rocket Mortgage application or the Rocket Cloud Force, which consists of sales team members spread over the platform. Its Partner Network is a collaboration with leading consumer-focused businesses, brokers, and mortgage specialists who use its platform and scale to offer mortgage solutions to their customers. The Rocket Professional platform helps the company’s Partner Network, which uses its client service and well-known brand to create marketing and influencer relationships, as well as its mortgage broker alliances through Rocket Pro third-party origination (TPO).

Rocket Companies’ Chief Executive Officer and Director are Jay Farner. Since 1996, he has worked for Quicken Loans and has held senior leadership positions since 1999. Jay was President and Chief Marketing Officer before being promoted to CEO in 2017. He is also the Chief Executive Officer and Director of RHI and its subsidiaries. Jay sits on the boards of Detroit Labs, LLC, Community Solutions, StockX, Bedrock Manufacturing, the Metropolitan Detroit YMCA, Bizdom Fund, and Rocket Giving Fund, among others.

Opinion: We got really lucky once with Rocket, $RKT. This was before Rocket turned into such a reliable loser of a stock. I was out skiing, on a rare day at Park City Mountain, specifically the Canyons and I was coming back to my car on the People Mover. There were 15 minutes left in the trading day and I glanced at my phone again, maybe the 4th or 5th time to see if there were any new developments.

My god, this must be a mistake, I thought. Rocket Companies stock had spiked from the low $20’s to over $35.  I rapidly scanned the news to see if there was anything to merit this and found no news.  With just minutes left in the day, I managed to unload the entire position near the high.  This was March 5th of 2021, and it’s been a year of pain for RKT bag holders since then.  I know I’ve been back in the name intermittently and have always come out on the short side of the stick since that fortuitous day.

CEO is on a buying spree
Jay Farner is on a buying binge

CEO Jay Farner has been on a buying spree of his company’s stock. This is his 5th buy and largest to date in the last two weeks. There still is an enormous short interest in this stock.  It seems like there’s been a big bet against Rocket Mortgage since it went public in August of 2021. So what’s up with RKT? Who’s been shorting RKT? And why now? The stock has been cut by more than half.

Sure mortgage rates are at the highest levels since 2011 but the stock reflects that. I’d think the shorts would cover here as to how much better can it get? Perhaps lightning can strike in the same place.  I think RKT makes some sense here for a speculative short squeeze rocket trip ride.

 


 

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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 within 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. SECForm4 is one of the smaller ones but I like supporting Frank. He is not arrogant. He’s helpful and has great prices. He also trades on his own data so I like people that eat what they kill.

“Typos Modus Operandi” if you can’t figure out what I meant
you shouldn’t be reading my emails anyway. In other words, the typos are free.                                                                                                                                                                                                                                                                                            n

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. It’s just one piece of the investor’s due diligence. The Insiders Fund blog informs you of the purchases that count.  As a rule, we only look at material amounts of money 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.  Do your own analysis. They can easily be wrong about, and in many cases, maybe most cases have no more idea what the future may hold than you or me. In short, you can lose money following them.  We have and we curse aloud, what were they thinking!

We like Fly on the Wall for keeping up with what events might be happening, analysts comment, and whatever else could be moving the stock.  Dow Jones news service is an essential tool but many services pick up their feed like they do Bloomberg. For quick financial analysis, it’s hard to beat Old School Value.

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. 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