Curious how well insiders are doing with their buys?

The Insider Report hit the ball out of the park Friday, August 5th. We hope you were in the stands with us to watch Carvana CVNA soar out of the stadium, up 40%. We have blogged about it several times in the Insiders Report. Numerous short sellers were saying that CVNA was going to go bust, and it reportedly had a short ratio of 40%, one of the largest out there. That means 40% of the holders of Carvana were betting it would go down, not up. Today they felt a lot of pain. Carvana was up 40%. A big shout out to K. for the catchy title, CARVANA NIRVANA.

Although the final chapter is far from written, I’ve always thought that what they were doing in the used car market was hugely disruptive but perhaps not worth the $350 it traded out last year, at least at the time. I took notice of it this year when management began buying enormous amounts of the stock with their own money. Generally, you can bet that when people running a business buy over $600 million of their company’s stock on the open market, they have some clue as to what they are doing.
I like to say insiders have as close to perfect information as possible, but their motives are not always pure. It would make my job easy and even easier to mimic if you could just rely on the Form 4 filings that are available to the public about insider buying.  What you can’t see are the myriad ways sophisticated insiders and their investment bankers have devised that allow them to mask their true intentions, like collared option programs that guarantee them profits in the event of a sell-off in their company’s stock that trigger automated sales while they appear to be buying it. Yes, the market is far from a level playing field for the general public, but it’s still reputed to be the best wealth creator there is, ahead of all asset classes including real estate.

 

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Name: Ready William J
Position: CEO
Transaction Date: 2022-08-03 Shares Bought: 222,551 Average Price Paid: $22.47 Cost: $5,000,009.00
Company: Pinterest Inc (PINS)
Operating both domestically and abroad as a visual search engine is Pinterest, Inc. People may find inspiration for their life via the company’s search engine, which also offers video, product, and idea pins. This inspiration includes recipes, home decor, DIY projects, and other topics. On the basis of pinners’ preferences and interests, it displays visual machine learning suggestions. Cold Brew Labs Inc. was the company’s previous name until it was changed to Pinterest, Inc. in April 2012. San Francisco, California, serves as the corporate headquarters of Pinterest, Inc., which was established in 2008.

At the moment, William J. Ready holds the positions of Senior Advisor at Brighton Park Capital LLC and President, Chief Executive Officer, and Director at Pinterest, Inc. Additionally, he serves on the boards of Williams-Sonoma, Inc., Venminder, Inc., and Automatic Data Processing, Inc. Former positions held by him include Chief Operating Officer and Executive Vice President of PayPal Holdings, Inc., Chief Executive Officer of Braintree Payment Solutions LLC (a subsidiary of PayPal Holdings, Inc.), Manager of Software and Product Development at Humana, Inc., Executive in Residence at Accel Partners LLC, President of iPay Technologies LLC, Principal at Netzee, Inc., and President of Commerce, Payments, and Next Billion Users at Google LLC. University of Louisville undergraduate and Harvard Business School MBA degrees were earned by William J. Ready.

Opinion: We shorted this name on the pop from disastrous quarterly earnings  and some vague and ludicrously pie-in-the-sky  language that its newest activist investor, Elliott Investment Management, ” Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest’s next phase of growth.”

This almost reminds me of Twitter.  If Twitter hasn’t figured out how to monetize its unique position by now, how is Elon going to do it?  The same thing goes, but more so for Pinterest. It may be true after all that Paypal was serious about buying Pinterest. People scoffed at the idea, and Paypal’s stock took a dive on the rumor leaked last year.  But the reality is that Paypal and Block ( the old Jack Dorsey company, Square) may both have a lot in common, pie-in-the-sky investors. Not many people talk about Block’s $300 million cash purchase of also-ran music streaming company no one has ever heard of, Tidal.

Here’s a better idea, Elliott Investment, merge Paypal, Block, Pinterest, and Tidal and rename it Pie in the Sky. Ready is rich, and no matter how his $5 million investment goes, the only thing at risk here is his reputation. Word of caution, we’re no longer short this name; it was held overnight. Shorting hype stocks can be disastrous, aka AMC or even Carvana. It takes a special kind of pain tolerance we don’t have. I’ll never forget when I was in Puerto Rico for a golf weekend and watched two stocks I was short going by on the ticker tape, both up $100 that day, and both ultimately went bankrupt. That was the Dot.com era, and we have a lot in common with it now. Bitcon et. al.

 

 

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Name: Brown Reginald J
Position: Director
Transaction Date: 2022-07-28 Shares Bought: 3,100 Average Price Paid: $99.35 Cost: $307,986.00

Transaction Date: 2022-07-28 Shares Bought: 3,100 Average Price Paid: $99.35 Cost: $307,986
Company: Blackstone Inc. (BX)
Blackstone Inc. is a financial services company. Investment vehicles focused on private equity, real estate, public debt, and equity, life sciences, growth equity, opportunistic, non-investment grade credit, real assets, and secondary funds are part of its asset management business. Real estate, private equity, hedge fund solutions, and credit and insurance are the company’s four segments. Blackstone Real Estate Partners (BREP) invests in a number of real estates operating companies as well as logistics, office, rental housing, hospitality, and retail properties. The corporate, private equity division, which includes Blackstone Capital Partners (BCP), Blackstone Energy Partners (BEP), Capital Partners Asia, and Blackstone Core Equity Partners, is part of the Private Equity segment (BCEP). Blackstone Alternative Asset Management is part of the Hedge Fund Solutions division, whereas Blackstone Credit is part of the Credit & Insurance segment.

Reggie (or Reg) Our Blackstone board of directors includes J. Brown. On September 15, 2020, Mr. Brown was elected to the board of directors. Mr. Brown is a partner at Kirkland & Ellis LLP Washington, D.C., office. Before joining Kirkland, Mr. Brown was a partner at WilmerHale, where he oversaw the congressional investigations practice as vice chair of the Crisis Management and Strategic Response Group and served as head of the firm’s Financial Institutions Group. Mr. Brown worked at Nationwide Mutual Insurance Company from 2003 to 2005 as vice president for corporate strategy, assistant to the CEO, and associate White House counsel. He was also a special assistant to the president. Mr. Brown serves on the boards of the National Center for State Courts, the American Council on Germany, the Property and Environment Research Center, and the Foundation for Excellence in Education. Mr. Brown graduated from Yale University with a BA and Harvard Law School with a JD.

Opinion: The pundits are all lined up on the recession camp. It’s only a matter of degree, mild or steep. That would be deeply painful for debt-laden private equity holdings, and Blackstone, being the poster boy, has been punished accordingly. Of course, this company is much more than private equity now as it’s been enormously successful and has a global reach. Director Brown sees an opportunity. I’m not surprised.

 

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Name: Ayers Andrea J.
Position: Direct
Transaction Date: 2022-08-04 Shares Bought: 15,500 Average Price Paid: $95.69 Cost: $1,483,142.00
Company: Stanley Black & Decker Inc (SWK)
In the United States, Canada, the rest of the Americas, France, the rest of Europe, and Asia, Stanley Black & Decker, Inc. operates companies related to tools, storage, and industry. Its Tools & Storage segment provides both professional products, such as corded and cordless electric power tools and equipment of the highest caliber, as well as pneumatic tools and fasteners, as well as consumer products, primarily under the BLACK+DECKER brand, including corded and cordless lawn and garden products and related accessories, home products, hand tools, power tool accessories, and storage items. This market sector offers its goods to professional end users, distributors, dealers, retail customers, and industrial clients in a variety of industries through retailers, distributors, dealers, and a direct sales force. The company’s Industrial segment sells and rents custom pipe handling, joint welding, and coating equipment for use in the construction of large and small diameter pipelines as well as providing pipeline inspection services.

Former Convergys Corporation President and CEO ANDREA J. AYERS has served as a director of the organization since December 2014 and was elected Chair of the Board with effect from April 22, 2022. From October 2012 to October 2018, Ms. Ayers served as Convergys Corporation’s president and chief executive officer. From October 2012 to October 2018, she also served as a director of the company. Ms. Ayers held the positions of President and Chief Operating Officer of Convergys Customer Management Group, Inc., respectively, from 2008 to 2012 and from 2010 to 2012. Ms. Ayers, 58, is a member of the Finance and Pension Committee, the Compensation and Talent Development Committee, and she chairs the executive committee. Ms. Ayers played a crucial part in Convergys’ evolution. She is an expert in customer management analytics and technology as well as omnichannel customer experience. The skills and knowledge of Ms. Ayers are a great asset to the board and management.

Opinion: “While the macroeconomic environment – including inflation, rising interest rates and significantly slower demand in late May and June – drove the majority of the challenges we faced this quarter, these headwinds underscore the need to accelerate our strategic transformation. As the softening of the demand environment accelerated rapidly during the last portion of the quarter, we began taking immediate corrective cost actions, which we are continuing to implement. We are now preparing for demand to normalize closer to 2019 levels for the remainder of 2022.”  Not the headline you want to hear when you are a Black and Decker shareholder, but that’s what they got on their most recent quarterly earnings announcement.

Don’t get hung up holding a company to its headlines. You can make money on a crummy stock if it’s cheap enough AND doesn’t go BK.  When a director buys $1.5 Million of stock after really poor results, you might see an opportunity in SWK stock. I don’t, though but it could easily retrace back to $100.  SWK looks like a dumping ground for private equity.

Stanley Black & Decker has acquired 29 companies, including 7 in the last 5 years. A total of 11 acquisitions came from private equity firms. It has also divested 9 assets.

Stanley Black & Decker’s largest acquisition to date was in 2010, when it acquired Black & Decker for $4.5B. It’s largest disclosed sale occurred in 2021, when it sold Stanley Black & Decker – Security Business to Securitas AB for $3.2B.   Very few companies laden with debt, serial acquirers and run by private equity are good investments after they are repackaged and dumped back on the public markets. I’m a huge skeptic and cynic of private equity in general, but I do have to admire how they manage to keep a tax shelter just for themselves.  The latest news on the carried interest tax treatment just blows me away.

For starters, the basic myth and selling point are flawed.  When the owner sells out, that magic is gone.  I’m not convinced that whatever the smart whiz kid MBA management P.E adds is a value-creating replacement for the combination of grit, drive, and moxy that built the company in the first place. And I don’t believe their marks. All the big university endowment funds showed great relative performance in 2008 due to their false mark to market assumptions. It was only a couple of years later that you realized many of their holdings went bust, and they took the write-offs and found cushy new jobs managing money somewhere else.

 

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Name: Cartwright Christopher A
Position: CEO
Transaction Date: 2022-08-04 Shares Bought: 25,000 Average Price Paid: $79.42 Cost: $1,985,450.00
Company: TransUnion (TRU)
Risk and information solutions are offered by TransUnion. The business is divided into the U.S. Markets, International, and Consumer Interactive sectors. Businesses may get consumer data, useful insights, and analytics from the U.S. Markets sector. These companies make use of their services to increase customer acquisition, evaluate customer ability to pay for services, spot cross-selling possibilities, gauge and manage portfolio risk associated with debt, collect a debt, confirm client identities, and reduce fraud risk. The financial services, insurance, tenant and employment, collections and services, technology, commerce and communication, public sector, media, and other vertical sectors are among the industries served by this category. The International segment provides consumer services that assist consumers in managing their personal finances, as well as consumer credit reporting, insurance and auto information solutions, and commercial credit information services. It also provides analytics, technology solutions, and other value-added risk management services.

Since May 2019, Christopher A. Cartwright has led TransUnion as president and chief executive officer, and a member of the board of directors. As the head of the company’s largest business unit, he helped TransUnion become a global information and insights company by providing consumer reports, risk scores, analytical services, and decision technology to customers in the United States in the financial services, insurance, tenant and employment screening, and public sector industries. He joined the company in August 2013 and previously held the position of Executive Vice President, U.S. Information Services.Mr. Cartwright served as CEO of Decision Insight Information Group, a portfolio of independent companies that offer real property information, software, and services to insurance, financial, legal, and real estate professionals in the US, Canada, and Europe, before joining TransUnion. A global provider of information services and workflow solutions, Wolters Kluwer, was another employer of Mr. Cartwright’s for about 14 years. While there, he held a number of senior roles with increasing levels of responsibility. Prior to joining Wolters Kluwer, he served as Coopers and Lybrand’s Strategy Consultant and Christie’s Inc.’s Senior Vice President, Strategic Planning & Operations.

Opinion:  This is a good leading indicator of credit demands. Most credit checks are for houses and auto loans, business loans and other items, like home improvement.  Both Transunion and FICO show some insider buying, Recession is probably unlikely based on their buying.  Large purchase by the CEO at the lowest price in a  year is favorable for gains. We’d buy this.

 

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Name: Kim Bernard Jin
Position: CEO
Transaction Date: 2022-08-04 Shares Bought: 16,000 Average Price Paid: $63.58 Cost: $1,017,280.00
Company: Match Group Inc. (MTCH)
International dating services are offered by Match Group, Inc. Tinder, Match, Meetic, OkCupid, Hinge, Pairs, PlentyOfFish, and OurTime are just a few of the brands in the company’s portfolio. The business is headquartered in Dallas, Texas, and was incorporated in 1986.

The Chief Executive Officer & Director of Match Group, Inc. is Bernard Jin Kim. Additionally, he serves on the Science Strategic Acquisition Corp. board. Mr. Kim formerly held the positions of Director-Sales & Channel Strategy at The Walt Disney Co., President-Publishing at Zynga, Inc., and Senior Vice President-Mobile Publishing at Electronic Arts, Inc. Boston College awarded him an undergraduate degree.

Opinion: From Post on the Fly  “Any way you slice it, Match’s commentary was largely disappointing across most metrics,” Piper Sandler analyst Matt Farrell tells investors in a post-earnings research note. Tinder is getting a face lift after execution hiccups, the Q3 revenue guidance calls for essentially flat year-over-year growth, and Hyperconnect had an intangible impairment charge, says the analyst. Farrell, however, continues to like Match Group shares, saying it is “better to rip the band-aid off all at once in order to drive the necessary changes.” He says the new CEO Bernard Kim is putting his plan in place and keeps an Overweight rating on the share.

I completely discount the purchase from a new CEO.

 

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Name: Stallings Robert W
Position: Director
Transaction Date: 2022-08-04 Shares Bought: 2,275 Average Price Paid: $58.84 Cost: $133,861.00
Company: Texas Capital Bancshares Inc (TCBI)
Texas Capital Bancshares, Inc. is a full-service financial services organization that provides tailored solutions to businesses, entrepreneurs, and individual consumers. Commercial banking, consumer banking, investment banking, and wealth management are all services provided by the organization. It provides commercial deposit accounts, lockbox accounts, and cash concentration accounts, as well as information, wire transfer initiation, ACH initiation, account transfer, and service integration services; and consumer deposit accounts, such as checking accounts, savings accounts, money market accounts, and certificates of deposit.It serves the Texas urban regions of Austin, Fort Worth, Dallas, Houston, and San Antonio. Texas Capital Bancshares, Inc. is based in Dallas, Texas, and was founded in 1996.

Stallings, Robert William Texas Capital Bancshares, Inc., Independent Director Robert William Stallings, the founder of ING Pilgrim Capital Corp., is a businessman who has led five different firms and is Chairman & Chief Executive Officer of Stallings Capital Group, Inc. Texas Capital Bancshares, Inc., MGA Insurance Co., Inc., Texas Capital Bank NA, and Crescent Realty, Inc. are all on Mr. Stallings’ board of directors. Mr. Stallings has previously served as Trust Manager at Crescent Real Estate Holdings LLC, Executive Chairman and Chief Strategic Officer at GAINSCO, Inc., Chairman and Chief Executive Officer of Resource Bank, NA (Dallas, Texas), Chairman of ING Pilgrim Capital Corp., and Chief Executive Officer of Pilgrim Capital Corp. Johnson & Wales University, Inc. awarded Robert William Stallings an undergraduate degree.

Opinion: Look at the steep rise in the most recent days of this stock. I’ve written about this name before, most notably that no analysts like it but Mr. Stallings keeps buying. I would add that it’s up over 5.7% since June 22nd, while the regional bank ETF KRE is down 0.36%. We own both, but you know which one I would rather have more of.

 

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Name: Pupkin Sergio A
Position: VP
Transaction Date: 2022-08-04 Shares Bought: 1,000 Average Price Paid: $57.66 Cost: $57,658.00
Company: Sealed Air Corp (SEE)

Name: Doheny Edward L II
Position: CEO
Transaction Date: 2022-08-04 Shares Bought: 4,500 Average Price Paid: $56.95 Cost: $256,274.00
Company: Sealed Air Corp (SEE)
In North America, South America, Europe, the Middle East, Africa, and the Asia Pacific, Sealed Air Corporation offers equipment and solutions for product protection, food safety, and security in those regions. It works in the Food and Protective sectors. Under the CRYOVAC, CRYOVAC Grip & Tear, CRYOVAC Darfresh, Simple Steps, and Optidure brands, the Food segment offers integrated packaging materials and automation equipment solutions to food processors in the fresh red meat, smoked and processed meats, poultry, seafood, plant-based, and dairy markets to provide food safety and shelf life extension, reduce food waste, automate processes, and optimize total cost. Through its sales, marketing, and customer support staff, this market sector sells its solutions directly to consumers. Under the brands SEALED AIR, BUBBLE WRAP, AUTO BAG, SEALED AIR, AUTO BAG, Instapak, Korrvu, Kevothermal, and TempGuard, the Protective segment offers foam, inflatable, suspension and retention, temperature assurance packaging solutions to protect goods to e-commerce, consumer goods, pharmaceutical, and medical device markets, and industrial manufacturing markets.

VP, Chief Growth & Strategy Officer at Sealed Air, is Sergio Pupkin. He is in charge of the company’s corporate strategy, international M&A, integrated brand messaging, and digital operations for Sealed Air, including e-commerce and SealedAir.com. He works closely with the executive team to develop strategies and see them through to effective implementation in this capacity. Sergio joined the leadership team after working for Diversey Care, a leading provider of hygiene and cleaning solutions, for more than 20 years. Sergio formerly worked at Diversey Care as global vice president of marketing and business development. Prior to that, he had a number of jobs with increasing levels of responsibility in general management, sales, business development, innovation, and strategic marketing. Sergio has a broad global and multicultural perspective thanks to his expertise gained via several overseas assignments, including those in Latin America, Mexico, and EMEA, in roles with local, regional, and global responsibilities. A number of transformation initiatives have been led by him.

The President and Chief Executive Officer of Sealed Air are Mr. Doheny. In September 2017, Mr. Doheny joined Sealed Air as a chief operating officer, CEO-designate, and director. He was appointed President and CEO on January 1, 2018. At Joy Global Inc., where he has worked since 2006, Mr. Doheny previously held the positions of president and chief executive officer, and director from December 2013 to May 2017. Mr. Doheny worked for Ingersoll-Rand Co. for 21 years before joining Joy Global, rising through the ranks to become president of Industrial Technologies from 2003 to 2005 and president of the Air Solutions Group from 2000 to 2003, among other senior executive positions with increasing levels of responsibility.In his present role as a director for Eastman Chemical Corporation, Mr. Doheny sits on the committees for audit, finance, and environmental, safety, and sustainability. Mr. Doheny served as a director for John Bean Technologies Corporation from 2012 to 2019. He was a member of the committees for nominating and governance as well as remuneration.

Opinion: This could be opportunistic buying of a distressed stock. If I were the CEO and wanted to instill some confidence, I’d buy some stock here as well. Unfortunately, painting the tape is a well-known practice. At this level of diminutive buying by the CEO, this looks like the latter, not the former.

 

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Name: Mcmullen W Rodney
Position: Director
Transaction Date: 2022-08-03 Shares Bought: 6,000 Average Price Paid: $44.76 Cost: $268,572.00
Company: V F CORP. (VFC)
VF Corp (VF) designs, manufactures, distributes, and markets lifestyle apparel, footwear, and accessories. Jeanswear, outdoor and action sports, eyewear, and athletic goods such as clothes, accessories, purses, luggage, totes, and backpacks are all available. It sells merchandise through its VF-owned stores, concession retail locations, and e-commerce sites. Various specialized stores, department stores, national chains, mass merchants, agents, distributors, and independently-operated partnership stores are also used to advertise these items. North Face, Wrangler, Timberland, Vans, and Lee are some of the brands marketed by VF. The corporation has operations in Europe, Asia, and the Americas. The headquarters of VF is in Denver, Colorado, United States.

Since January 2014, Mr. McMullen has held the positions of Chairman of the Board and Chief Executive Officer of The Kroger Co., one of the biggest food retailers in the world. Previously, from August 2009 until December 2013, he was the company’s President and Chief Operating Officer. Mr. McMullen had previously been chosen for the positions of Vice Chairman in 2003, Executive Vice President in 1999, and Senior Vice President in 1997. From 2001 until May 2020, Mr. McMullen held the position of director at Cincinnati Financial Corporation.

Opinion: Really, Mr. Mcullen. The best a director can do is buy $265K worth of stock when it’s trading at half of what it started the year at. I’m reasonably comfortable that this is painting the tape. When I see $millions of insider buying in VFC, I’ll take notice.

 

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Name: Milikin Maurice Anthony
Position: Chief Supply Chain Officer
Transaction Date: 2022-08-01 Shares Bought: 12,979 Average Price Paid: $38.93 Cost: $505,272.00
Company: Keurig Dr Pepper Inc. (KDP)
With annual revenue, it is a leading beverage company in North America. KDP is a market leader in soft drinks, specialty coffee and tea, water, juice, juice drinks, and mixers, as well as the #1 single-serve coffee brewing machine in the United States and Canada. Keurig®, Dr. Pepper®, Green Mountain Coffee Roasters®, Canada Dry®, Snapple®, Bai®, Mott’s®, CORE®, and The Original Donut Shop® are among the Company’s more than 125 owned, licensed, and partner brands, which are designed to meet almost any customer demand, at any moment. KDP can bring its line of hot and cold beverages to practically every point of purchase for consumers, thanks to its extensive sales and distribution network. The Company is committed to sourcing, producing, and distributing its beverages responsibly through its Drink Well. The company, formerly Dr. Pepper Snapple Group, is one of North America’s largest beverage companies, with more than 125 owned, licensed, and partner brands. It owns the top single-serve coffee system in the US (Keurig) and one of the US’s leading soft drinks (Dr. Pepper).

Tony Milikin is Keurig Dr. Pepper’s Chief Supply Chain Officer. He is in charge of the Company’s whole supply chain, including production, procurement, logistics, warehousing, transportation, and quality, as well as the environment, health, and safety. Prior to joining KDP in 2021, he was Chief Procurement, Sustainability, and Circular Ventures Officer at Anheuser-Busch InBev, where he was in charge of 70 vertical operations sites. Tony formerly served as MeadWestvaco’s Senior Vice President of Supply Chain, bringing more than 30 years of worldwide expertise in supply chain management. Tony has a master’s degree in business administration from Texas Christian University and a bachelor’s degree in business administration from the University of Florida.

Opinion: KDP must have a hell of a management-buying incentive program. Many public companies have written and undisclosed arrangements where management is considered to have a percentage of their comp in the company’s stock. I wouldn’t be surprised if Keruig Dr. Pepper has such. It hasn’t been a bad buy either, as combined with its dividend, it provided an annualized return of 11% or more over the last few years. You could do worse, but I’m not personally keen on such low returns.

 

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Name: Garza Antonio O
Position: Director
Transaction Date: 2022-08-02 Shares Bought: 8,195 Average Price Paid: $30.50 Cost: $249,967.00
Company: Greenbrier Companies Inc (GBX)
Equipment for railroad freight cars is designed, produced, and sold by The Greenbrier Companies, Inc. throughout North America, Europe, and South America. Manufacturing, Wheels, Repair & Parts, and Leasing & Services are its three business segments. The Manufacturing division provides standard railcars like covered hopper cars, boxcars, center partition cars, and bulkhead flat cars, as well as tank cars, double-stack intermodal railcars, auto-max, and multi-max products for the transportation of light vehicles, flat cars, coil cars, gondolas, sliding wall cars, and automobile transporter cars, as well as marine vessels. The Wheels, Repair & Parts segment operates a railcar repair, refurbishment, and maintenance network that offers wheel services such as reconditioning of wheels and axles, new axle machining and finishing, downsizing, and reconditions, and manufacturing railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts. It also produces roofs, doors, and related parts for boxcars. For a fleet of about 8,800 railcars, the Leasing & Services section offers operating leases and “per diem” leases in addition to management services, including railcar maintenance management and accounting services for railcars fleet management and logistics, administration, and railcar remarketing.

Since 2021, Mr. Garza has been a member of the Board. He currently holds the position of Counsel at White & Case LLP, one of the top international legal companies, in its office in Mexico City. From 2002 until 2009, Mr. Garza worked as the American ambassador to Mexico before joining White & Case. In addition, Mr. Garza serves as chairman of Kansas City Southern de México, the business’s Mexican affiliate, and is a director of Kansas City Southern, a publicly listed rail transportation corporation. He is on the board of directors for MoneyGram, a prominent international money transfer business. Mr. Garza served as the Railroad Commission of Texas’ previous chairman from 1998 to 2002 after being elected to the position at the state level. The board of trustees at Southern Methodist University includes Mr. Garza. Garza is a member of the Council on Foreign Relations (CFR), the Mexican equivalent of the CFR, and the Americas Society, the US Chamber of Commerce in Mexico. Mr. Garza served as the Secretary of State for the State of Texas from 1994 to 1997. From 1994 to 1997, he also served as the Governor of Texas’ Senior Policy Advisor. Prior to this, Mr. Garza served as Cameron County Judge from 1988 until 1994. He is admitted to practice before the US Supreme Court and is a member of the District of Columbia Bar and the State Bar of Texas.

Opinion:

 

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Name: Rady Ernest S
Position: CEO/Chairman/10% Owner
Transaction Date: 2022-08-01 Shares Bought: 35,000 Average Price Paid: $29.73 Cost: $1,040,550.00

Transaction Date: 2022-08-04 Shares Bought: 20,000 Average Price Paid: $28.87 Cost: $577,400.00
Company: American Assets Trust Inc. (AAT)
American Assets Trust is a self-administered real estate investment trust (REIT) that primarily owns, develops, and operates premium retail, office, and residential property throughout Northern and Southern California, as well as Oregon, Washington, Texas and Hawaii. Its 3.1 million square foot portfolio includes over ten commercial complexes, roughly ten office buildings, a 369-room hotel and retail complex, and over five multi-family residential assets. SalesForce, Autodesk, the Veterans Benefits Administration, and well-known businesses Kmart, Lowe’s, Sports Authority, Old Navy, and Vons are among the tenants. The company was founded in 1967 as American Assets and became public in 2011.

Ernest S. Rady is the Company’s Chairman of the Board, President, and Chief Executive Officer. Mr. Rady has been our President and Chief Executive Officer since September 2015 and Chairman of our Board since our initial public offering in January 2011. Mr. Rady formed American Assets, Inc. in 1967 and is currently its president and chairman of the board of directors. Mr. Rady also established the Insurance Company of the West and Westcorp, a financial services holding company, in 1971. Mr. Rady was chairman and chief executive officer of Westcorp from 1973 to 2006. Mr. Rady was the chairman of Western Financial Bank from 1982 to 2006, as well as the chief executive officer from 1994 to 1996 and 1998 to 2006.

Opinion: Retail REITs and office REITs have generally not been the place to be. Work from home, hybrid or not, has cast a pall on the office market.  Well, we all know that Amazon has obliterated bricks and and-mortar retailers.  Mr. Rady buys a ton of his Company’s stock, and clearly, he’s no dummy. It’s not like he needs more of it, either. The latest filings show him owning over 11 million shares. Patient investors might be wise to take heed.

 

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Name: Rutherford John R
Position: Director
Transaction Date: 2022-08-04 Shares Bought: 6,500 Average Price Paid: $25.78 Cost: $167,543.00
Company: Enterprise Products Partners L.P. (EPD)
Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services. It operates 21 natural gas processing facilities in Colorado, Louisiana, Mississippi, New Mexico, Texas, and Wyoming; NGL pipelines; NGL fractionation facilities; NGL and related product storage facilities; and NGL marine terminals. The Crude Oil Pipelines & Services segment operates crude oil pipelines; and crude oil storage and marine terminals, including a fleet of 310 tractor-trailer tank trucks used to transport liquefied petroleum gas. It also engages in crude oil marketing activities.

Mr. Rutherford was elected as a director of Enterprise GP in January 2019 and is a member of its Audit and Conflicts Committee. He is a Senior Managing Director of NRI Energy Partners LLC. This firm evaluates and invests in private and public energy companies and provides financial and strategic consulting services to energy companies and investment firms. His career includes over 20 years of investment banking experience as mergers and acquisitions and strategic advisor to public and private energy companies, investment firms, management teams, and boards of directors. Before joining Plains, Mr. Rutherford served as Managing Director of the North American Energy Practice of Lazard Freres & Company from 2007 until 2010.

Opinion: Director Rutherford has been a steady buyer of EPD, and so have we. The infrastructure pipeline companies are not particularly commodity price sensitive as most of them have volume, not price-based contracts. I think we will need and use natural gas until the planet runs out, climate be damned. I love the planet as much as the next person, but we get paid to invest based on the future we expect, not the ones we hope for. Enterprise  Products pays over a 7% dividend with little risk of not paying or growing IMHO.

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Name: Roll Penelope F
Position: CFO
Transaction Date: 2022-08-03 Shares Bought: 25,000 Average Price Paid: $19.77 Cost: $494,250.00
Company: Ares Capital Corp (ARCC)
Ares Capital Corp is a middle market investment firm based in the United States and Canada. Health Care Services, Software & Services, Consumer Durables & Apparel, Energy, Food & Beverage, and Retail are among the sectors targeted by the fund. Buyouts, acquisitions, recapitalizations, restructurings, rescue finance, growth capital, and general refinancing are all covered. It invests in both debt and equity assets in the form of a complete capital structure. It takes a seat on the board of directors and functions as a lead investor.

The Chief Financial Officer and a Partner at Ares Credit Group is Ms. Roll. Additionally, she holds the positions of treasurer for the Ares Dynamic Credit Allocation Fund, Inc. (NYSE: ARDC), the CION Ares Diversified Credit Fund, and the Chief Financial Officer of Ares Capital Corporation (NASDAQ: ARCC). Ms. Roll also holds the positions of vice president, treasurer, and chief financial officer of IHAM, as well as the general partner, Ivy Hill Asset Management GP, LLC, where she also sits on the board of managers. Additionally, she could occasionally hold positions of leadership in other Ares Management-affiliated companies, investment funds, or as a director, principal, or officer. Ms. Roll is a member of the Ares Diversity, Equity, and Inclusion Council as well. Ms. Roll held the position of Chief Financial Officer of Allied Capital Corporation from 1998 until she joined Ares Management in April 2010. Ms. Roll worked as a Manager in the financial services practice of KPMG LLP before joining Allied Capital Corporation in 1995 as its Controller.

Opinion:

Finviz Chart

Name: Doman Curtis Linn
Position: Chief Innovation Officer-PROG
Transaction Date: 2022-08-03 Shares Bought: 50,000 Average Price Paid: $19.25 Cost: $962,500.00
Company: PROG Holdings Inc. (PRG)
As an omnichannel supplier of lease-purchase solutions to underserved and credit-challenged clients, ROG Holdings, Inc. Progressive Leasing and Vive are its two operating divisions. Through point-of-sale and e-commerce retail partners, as well as in-store, mobile, and online solutions, the Progressive Leasing segment provides customers with lease-purchase solutions for a variety of merchandise in the furniture, appliances, electronics, jewelry, mobile phones and accessories, mattresses, and automobile electronics and accessories markets. Through private label and Vive-branded credit cards, the Vive sector offers second-look and revolving credit solutions to customers who might not be eligible for conventional prime financing. In 49 states and the District of Columbia, it provides lease-purchase options through around 24,000 third-party point-of-sale partner locations and e-commerce websites. Prior to December 2020, the business was known as Aaron’s Holdings Company, Inc. Its new name is PROG Holdings, Inc. PROG Holdings, Inc., headquartered in Draper, Utah, and was established in 1955.

Mr. Doman is 48; he’s been the Chief Innovation Officer & Director of PROG since.

Opinion:  Too much for me. I’ll pass.

 

Finviz Chart

Name: Widra Howard
Position: CEO
Transaction Date: 2022-08-03 Shares Bought: 20,000 Average Price Paid: $13.01 Cost: $260,130.00
Company: Apollo Investment Corp (AINV)
The closed-end, externally managed, non-diversified management investment company Apollo Investment Corporation is a business development corporation. Under the Investment Company Act of 1940 (the “1940 Act”), it has chosen to be classed as a business development company (or “BDC”). It specializes in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing, and private middle market enterprises. Direct equity capital, mezzanine, stretch senior loans, unitranche loans, second lien secured loans, senior secured loans, unsecured debt, and subordinated debt and loans are among the financial products it offers. Additionally, it aims to invest in PIPES deals. The fund also has the option of purchasing assets on the secondary market, structured products, and thinly traded public company stocks. It makes equity co-investments and likes to invest in preferred equity, common stock, and warrants.

Since 2013, Mr. Widra has worked at Apollo and/or its affiliates, where he currently holds the position of Head of Direct Origination. In August 2022, he was named Executive Chairman. He was the Company’s President from June 2016 to May 2018 and its Chief Executive Officer from May 2018 to August 2022. Since May 2018, he has also served as a director. Mr. Widra was the former Chief Executive Officer and a co-founder of MidCap Financial, a middle-market specialized lending company with $21.4 billion in annual originations. Mr. Widra was the founder and president of Merrill Lynch Capital Healthcare Finance prior to founding MidCap Financial. Mr. Widra held top positions at Merrill Lynch’s predecessor companies before becoming president of GE Capital Healthcare Commercial Finance.

Opinion: Another private equity buy supports the no recession or very mild recession camp.

 

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Name: Asali Omar
Position: CEO/Chairman
Transaction Date: 2022-08-02 Shares Bought: 100,000 Average Price Paid: $5.04 Cost: $504,000.00
Company: Ranpak Holdings Corp. (PACK)
Product protection solutions are offered by Ranpak Holdings Corp. and its subsidiaries for e-commerce and industrial supply chains in North America, Europe, and Asia. The business provides protective packaging options, such as void-fill protective systems that transform paper into padding for cushioning secondary packages and protecting objects under the FillPak brand, cushioning protective systems that turn paper into padding pads under the PadPak brand, and wrapping protective systems that produce padding or paper mesh to wrap and protect fragile items as well as to line boxes and provide separation when shipping different objects under the ThumbPak brand. Additionally, the firm sells line automation systems that assist customers in automating the void filling and box closure procedures when product packaging is finished. It mostly sells its products to end users through a distributor network, although it also sells to certain end users directly. The headquarters of Ranpak Holdings Corp. is in Concord Township, Ohio, where it was established in 1972.

The chairman and CEO of Ranpak Holdings Corp. and the founder of One Madison Group are both Mr. Omar M. Asali (NYSE: PACK). Omar now has board positions in Plenty, Carbone Fine Foods, and Pickle Robot, in addition to Ranpak. Omar has over 20 years of experience with creative, fast-growing public and private businesses in numerous market cycles as an operator, director, and investor. At the HRG Group (NYSE: HRG), where he formerly served as chief executive officer, president, and a member of the board of directors, Omar was in charge of managing day-to-day operations, including M&A and overall company strategy. Omar was also a director of Fidelity & Guaranty Life and the vice chairman of Spectrum Brands Holdings (NYSE: SPB).

Opinion: I’m dipping my toe into the water with Pack.$5 stocks can make big percentage moves especially after a long descent.  This should stabilize it at worst.

 

Finviz Chart

Name: Skelton Clifford
Position: CEO
Transaction Date: 2022-08-04 Shares Bought: 47,675 Average Price Paid: $4.23 Cost: $201,617
Company: Conduent Inc. (CNDT)

Name: Wood Stephen Henry
Position: CFO
Transaction Date: 2022-08-04 Shares Bought: 47,455 Average Price Paid: $4.21 Cost: $199,786.00
Company: Conduent Inc. (CNDT)
Conduent Incorporated offers business process services in the United States, Europe, and other countries with expertise in transaction-intensive processing, analytics, and automation. Commercial Industries, Government Services, and Transportation make up its three operating segments. In addition to end-user customer experience management, transaction processing services, healthcare, human resource management, and learning services, the Commercial Industries division provides clients in a variety of industries with business process services and tailored solutions. For public assistance, program administration, transaction processing, and payment services, medical management and fiscal agent care management services, government healthcare, payment options, child support, and federal services, the Government Services segment offers these services to the federal, state, local, and foreign governments of the United States.

Cliff Skelton is committed to guiding Conduent to growth and long-term success in his roles as president, chief executive officer (CEO), and member of the board. Cliff is spearheading Conduent’s strategy to provide governments and international enterprises with mission-critical services and solutions, producing outstanding results for them and the millions of clients they serve. Cliff previously worked as a fighter pilot and navy commander for more than 20 years. He held a number of strategic positions during his time at organizations like Ally Financial (formerly General Motors Acceptance Corporation) and Bank of America, including Global Head of Technology and Operations, Transition Executive, and other roles on both companies’ Management Operating Committees. He was a member of the Class of 1997–1998 White House Fellows program, flew as a pilot with the United States Navy Flight Demonstration Unit (The Blue Angels), and led a Navy F/A-18 squadron. Cliff has a Bachelor of Arts from the University of Southern California and a Master of Public Administration (MPA) from the John F. Kennedy School of Government at Harvard University.

Steve is in charge of Conduent’s entire finance, treasury, investor relations, mergers & acquisitions, tax, and audit departments on a worldwide scale. He has a track record as an experienced finance executive who has successfully led big teams through change and contributed to company transformation and acquisition integration efforts in complex, multinational enterprises. Steve has held the position of Principal Accounting Officer at Conduent since December 2020 after serving as Corporate Controller from August 2020. He worked with Fiserv Inc. for 15 years prior to joining Conduent, holding top positions in finance and accounting, including Chief Financial Officer of Fiserv Output Solutions, Controller of many operating groups, and International Finance and Accounting Operations. Steve holds a Chartered Global Management Accountant designation and a Warwick Business School MBA with distinction.

Opinion: No

 

Finviz Chart

Name: Smith Wayne T
Position: Chairman
Transaction Date: 2022-08-01 Shares Bought: 1,000,000 Average Price Paid: $2.95 Cost: $2,952,000
Company: Community Health Systems Inc. (CYH)
In the US, Community Health Systems, Inc. owns, rents, and manages general acute care hospitals. It provides skilled nursing and home care services in addition to general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric, and rehabilitation services. The business also offers outpatient services at general practitioners’ offices, urgent care facilities, standalone emergency rooms, ambulatory surgery centers, imaging, and diagnostic facilities, retail clinics, and virtual health visits for direct clients. By the end of 2021, it owned or leased 83 hospitals with 13,289 licensed beds, including 81 general acute care facilities and two independent mental or rehabilitation facilities. Franklin, Tennessee, serves as the company’s headquarters. It was established in 1985.

In 1997, Wayne Smith began working for Community Health Systems as president and CEO. He was appointed Chairman of the Board in 2001. Smith changed his title from Chairman and CEO to Executive Chairman of the Board of Directors in January 2021. Smith is one of the healthcare industry’s leaders with the longest tenure. He has gained professional acclaim throughout the years from his peers, investors, and the business world. He was included on the list of the 100 Most Influential People in Healthcare published by Modern Healthcare for 19 years running. Smith has often been recognized as a Top CEO for the healthcare facilities industry by Institutional Investor magazine. Mith served as the Federation of American Hospitals’ board’s previous chair. He now sits on the board of trustees at Auburn University and has served as past chair and former board member of the Nashville Area Chamber of Commerce and the Nashville Health Care Council.

Opinion:  Large buy with an insider that has a good track record. This will probably work out ok.

 


 

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COO Douglas Edward Jones purchased 7,000 shares at $14.31 of $NEOG
Opinion: The company announced, Reports Q1 revenue of $132.35M vs. $128.31M a year ago. “During the first quarter of our 2023 fiscal year. Full article at: https://www.theinsidersfund.com/2022/10/insider-buying-week-9-30-22/

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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.

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.

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, 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’ comments, 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