The Insider Report

Insider Buying Week 11-03-23 Insider Buying offers Clues as to where Bargains might Await

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The difference between the 10-year Treasury Bond yield and the S&P 500 dividend yield is the largest it’s been since 2007.  The spread between interest earned on Treasury Bills and dividends reached levels not seen in 40 years. ~5% money market rates and an S&P 500 dividend yield of 1.52% cannot coexist indefinitely. This is not a condition for equilibrium. Something must give. Great amounts of money will be made in getting this right. In the immortal words of Dylan, the poet laureate, “Something is happening here; But you don’t know what it is.” The market changed its narrative last week from higher for longer … Read more

‘s Wrong with this Market? Insider Buying Week 10-27-23

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$OXYLast week, I had two conversations with astute market watchers, one a long-time successful UBS financial wealth manager and the other, a close personal friend who bought the second charity lunch with the Oracle of Omaha.  He is a lifelong fan of Warren Buffet and a long-time investor in Berkshire Hathaway.  I presented them both with the same market fact- that over the last 40 years, ~40% of the overall return of the S&P 500 has been from dividends. I asked them both the same question and got nearly identical answers. What do you think the dividend yield of the … Read more

Insider Buying Week 10-20-23 – Next week may be the spookiest in some time.

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So far, 3rd quarter earnings haven’t done anything to dispel the gloom. The S&P 500 lost 2.39% last week. That’s hardly a surprise. What’s a bigger surprise is that the market is hanging on to any gains at all this year. We’ll find out how lopsided investment returns are when the tech giants report earnings this coming week. The entire S&P 500 now hangs on Microsoft, Google, Alphabet, Meta, and Amazon as the broader market is a veritable dumpster fire. It seems like a tall order that investors continue to bid these stocks higher just because they have a lot … Read more

Insider Buying Week 10-13-23 The Black Swan has been Spotted

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The market bounced off deeply sold, technically oversold conditions.  Now we’re in earnings season, and much if not everything, will hinge on that. Of course, a broadening war is on everyone’s mind. There’s no way the Fed will raise interest rates with all the geopolitical and domestic political angst. It remains to be seen if any insiders buy this market. I suspect some buying from deeply wounded sectors like utilities and REITs but not much else. You can be an insider, too– by clicking here Name: Vlad Coric Position: Chief Executive Officer Transaction Date: 2023-10-05 Shares Bought: 454,545 Average Price … Read more

Insider Buying Week 10-06-23 Israel at War while the Fed Reserve Fights the American Consumer and Stock Market

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The market reached deeply technically oversold conditions.  Bullish divergence RSI was signaling a reversal. I would have said this reversal has room to run, but the war in Israel may reverse whatever animal spirits are forming. Give Peace a Chance looks like a nostalgic idea, with the axis of evil combined with Iran, Russia, and China financing it through the purchase of oil.  Why the U.S. doesn’t stop the transit of Iranian oil through the Hormuz straits is a mystery considering there have been dozens of provocative actions by Iran that have been stymied only by the U.S Navy coming … Read more

Insider Buying Week 9-29-23 as the Bar for Insider Buying is Rising

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You can’t say you were not warned. I’ve been clear with my thoughts about the misguided policy of the Federal Reserve raising rates to thwart inflation. Chairman Powell morphed chameleon-like into a new version of Paul Volker, a Paul Volker light at Jackson Hole in August 2022. He set the global economy on a tightening course that is academically correct but economically wrong. Reference this post from Insider Buying Week 8-26-22 Jerome Powell Debuts at Jackson Hole as “ChuckyIt was a blood-red day on the map of the market. As I wrote then, it’s true now. We have spent all … Read more

Insider Buying Week 9-22-23 The Setup Reminds me of the October Crash of 1987

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  This week’s blog post is especially brief. It’s not because brevity is the soul of wit, either. Insiders are in the third-quarter blackout window; even if they wanted to buy, most cannot. I doubt there would be much buying anyway at these levels as the news is gloomy, and there is clearly a draught in animal spirits.  The other reason is that I ran out of time. I went to San Diego for the weekend to attend the Miramar Air Show, the largest military airshow in the country.  My business excuse was to observe the Valkyrie stealthy drone firsthand … Read more

The Clinks in the Armor -Market Swoons on Friday- Where is the Super Hero?

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Let me ask you this-Can you afford not to be an insider?  With insiders largely absent due to the 3rd quarter earnings blackout- investors’ anxieties, fears, and uncertainties revealed themselves last Friday.  The rout in the markets portends an even uglier 2nd half of September.  Is this any surprise? A weakened President was attacked on all sides, by his own party wanting someone else to run and by the rabid right on charges of corruption and senility.  We have an unjust war brought on by our long-time nemesis, Russia. Some say we are not providing enough support for Ukraine, and … Read more

Insider Buying Week 9-08-23 ET Go Home

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Energy Transfer certainly looks like it is coming home for investors. Oil producers and suppliers have been on a steady ramp for the last month after lagging most of the year.  Ironically, lithium carbonate, the basic ingredient in EV batteries, is flirting with multi-year lows as the Inflation Reduction Act hands out $billions to build a domestic supply chain of lithium batteries.  Recent headlines trumpet the Administration’s ban on drilling for oil in the Arctic, yet new supply is the panacea for high prices. Conoco looks like the sole U.S. driller to plunge the Arctic unknown, but the market doesn’t … Read more

Insiders made some notable gains last week 9-01-23

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August ended on a low note as all three leading market indexes lost ground, with the Dow Jones Industrial Average (DJIA) falling 2.5%, the Nasdaq down 2.2%, and the S&P 500 off 1.7%. Insiders made some notable gains last week on their purchases, but since they are subject to the short-swing rule, it doesn’t really matter much to them since any short-term profits would have to be disgorged. For the most part, these insiders were bottom feeders on depressed company stock. You can be an insider, too– by clicking here   Name: James Hollingshead Position: President and CEO Transaction Date: … Read more

The Beauty Health Co

Insider Buying -Interest rates may have peaked but the damage to earnings is just beginning

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Market gains are muted, and traders are quick to snatch profits.  Rallies are reversed almost daily as market direction is indecisive.  By many measures, bargains in the stock market are hard to come by.  The earnings yield of the S&P 500 is 3.98%, and the P.E. is historically on the low side.  Earnings surprises are met with a sell-the-news trading mentality.  The economy is showing signs of stalling, yet the Fed has made it clear, that if rate hikes are near the end of the cycle, high-interest rates will be here for quite a while.  10% car loans and 7.3% … Read more

Insider Buying Week 8-18-23 before the Potential Powell Shitstorm in Jackson Hole

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We look at insider buying this week before the potential shitstorm next week.  It’s hard to believe that Longs can make money on the S&P 500 before a looming Fed Chairmen’s speech on Friday, August 25, at the annual Jackson Hole conference The central bankers, policymakers, and economists at Jackson Hole attempt to steer the global economy.  Powell unveiled his Paul Volker channeling act last Summer, setting off a one thousand-point drop in the Dow.  That’s too obvious a trade and likely crowded. If Powell is interpreted as anything dovish on the rate hikes, there could be a rip-your-face-off rally.  But … Read more

Notes from Enercom Denver August 2023- No Dessert at Lunch this Year

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Last August, I wrote thoughts on Denver Enercom 2022 Let The Good Times Roll.  Enercom is the annual oil and gas conference in Denver in August that brings together hydrocarbon energy producers and investors, analysts, vendors, suppliers, and groups generally economically tied to the industry.  The conference is free for me to attend, as I imagine it is for most. The people that pay get up on the stage and have something to say. I’ve been going to it for years, but this might be the last.  The companies presented are fewer, smaller, and more speculative. Attendance has always had … Read more

Insider Buying Week 8-11-23 and the Summer Doldrums

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We are not surprised by the momentum of the oil and gas sector, as it was only a matter of time before its strong fundamentals collided with short sellers and skeptical money managers. We wrote last week about the strong signals from Exxon’s latest quarterly earnings. Activist Exxon board member Jerry Ubben’s purchase of Exxon may have been the biggest act of his illustrious career.  CEO Darren Woods is transforming  Exxon into a juggernaut of earnings  AND the undisputed heavyweight of both hydrocarbons, renewables, and carbon capture. Its stands to dominate all.  According to Woods, there is no reason for … Read more

Insider Buying Week 8-04-23 Hydrocarbons Make the Modern World Modern

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Oil and gas have been the best-performing sector in the market for the last couple of weeks. There is much talk about an oil surplus, and economic weakness in China, the world’s largest petroleum consumer.  Analysts are often too deep in the woods to see the trees.  It is true that Opec et al. Russia fiddle with the supply of oil in an attempt to manipulate the price, but it is equally true that every industrialized economy attempts to influence the price, supply, and consumption of the world’s most important commodity. For example, The U.S. sold off its Strategic Petroleum … Read more

Insider Buying Week 7-28-23 Euphoria has Begun

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Last week pretty much heralded the end of the bear market.  True, long-lasting bull markets start with a plethora of insider buying. That’s obviously not happening.  I’m trying to figure out what that means.  Every significant market correction ended with a near explosion of the insider buying versus selling ratio going vertical. Right now, insiders are cautious. I think we should be too.  That doesn’t mean there won’t be anomalies.     Name: John H Stone Position: President and CEO Transaction Date: 2023-07-27  Shares Bought: 17,500 Average Price Paid: $116.62 Cost: $2,040,892 Company: Allegion plc (ALLE) Allegion plc, a leading … Read more

Insider Buying Week 7-21-23 Is the Bear Market Over?

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The headline in Bloomberg this weekend reads, “The Bear Market Has Nearly Been Erased, Fewer Than 20 Months After It Began.” Bear markets don’t come around often. However, when they do, they tend to cause some catastrophic damage to many investors. That’s why it is important to know how often bear markets occur and how long they will last. The average length of a bear market is 289 days or about 9.6 months.  By that measure, the bear market has already been over for some time. The thing about bear markets is that they tend to be much shorter than … Read more

‘s Different this Time

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Esteemed Wharton professor Jeremy Siegel says we are in a ‘Goldilocks economy’ and the Fed doesn’t need to raise interest rates anymore. You hear this term mentioned when almost all the risks and scary things that you can anticipate in the market are out there in full view, and nothing scares the crap out of you.  Top of my news feed this morning is the idea that we have a Goldilocks market.  I even wrote about it myself in The Insiders Fund’s most recent partner letter. The Goldilocks market is back.  So what is Goldilocks in financial terms?  According to … Read more

Insider Buying Week 7-07-23 Does the Marlboro Man want to break up with Mary Jane?

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The quarter end is normally a dead time for insider buying.  When July 4th falls in the middle of the week, it’s especially boring. There is one thing that stood out on the insider’s front. It’s a story that Reuters broke last Thursday. It was reported that Cronos (CRON)had received numerous buyout offers.  The $2 stock spiked on this news but couldn’t even hold any gains and closed Thursday at the same price or even lower than before the news broke. I find this curious. Reuters is credible. This is not some Reddit post or a firehose of idiots on … Read more

Insider Buying Week 6-30-23-The Nasdaq 100 notched its best-ever first half of a year.

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The Nasdaq 100 notched its best-ever first half of a year.  In a classic reversion to the mean, the worst-performing sector usually becomes one of the best-performing ones.  The Nasdaq 100 will need to rise nearly another 200 points to recoup the amount lost since December of 2021.   I doubt if it could have recouped these losses this fast, though, without the market hype about generative AI. Nasdaq had been on an unsustainable tear since the beginning of the 2020 work-from-home hyper stimulus-infused Pandemic.  I have no idea how long this can last, but I can say with reasonable confidence … Read more

Insider Buying Week 6-16-23

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Stock markets don’t go up every day, or do they? Friday might have been the crack in the armor as the generals sold off a bit. It’s hard to imagine what will bring the market down in the near term other than a bout of profit-taking in the big tech stocks that have run on AI mania. Of course, there are always black swans landing in unanticipated places, but a market being overvalued has never been a reliable case for a sell-off. That’s always a dicey proposition, thinking like that, but the bull is out in the pasture- there’s no … Read more

Insider Buying Week 6-09-23 Investors are Clipping Coupons while the S&P 500 storms higher 12% YTD

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It was a quiet week when it came to insider buying.  Dish Networks had a big percentage move off the bottom as rumors floated that Amazon might be finally making a move with the cellular bandwidth that Dish has spent so many billions of dollars accumulating.  On Friday, it gave back 12.5%.  Nothing deters  Director DeFranco as he bought $ 1.8 million more of Dish. There might actually be a plan for their madness, and it may have nothing at all to do with Amazon.  Perhaps there is a SpaceX rescue coming?  At this point, Dish stock is like an … Read more

Insider Buying Week 6-02-23 Animal Spirits Return

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Animal spirits returned in force last week. The average insider returned 7.96% and a median return of 6.61%. The S&P 500 scorched 3.97%. The safe money crowd collecting their guaranteed 4%-5% is near the half-year point. They’ve earned a little less than their guaranteed 2%. That’s 2% for the year to date when the market just turned in twice that for a week. Fear of missing out, FOMO, is a dangerous thing.  One way to avoid that investment mistake is to pay attention to what insiders are doing. Normally they don’t chase their stocks in a FOMO moment. They are … Read more

Insider Buying Week 5-26-23

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It’s all AI, Chat GPT, large langauge models, and generative image models. Nvidia’s blowout quarter and guidance sent the market into a bull run seizure moment.  Meanwhile, you hear more and more stories about fake information generated by this “breakthrough AI,” including the latest example on Twitter where an attorney was reprimanded by a judge for his brief, which included fake prior cases entirely fabricated by AI. We can’t ignore the promise, but we certainly shouldn’t be blindsided by the hype. Tread carefully here. At the Insiders Fund, we try to filter out the noise. Here’s what real insiders are … Read more

Insider Buying Week 5-19-23 If you want to play a game of chicken- Tyson Insiders are Buying

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No one really believes the U.S. will default on the debt.  The least of which are these insiders stepping up to buy their company’s stock last week.  If we’re talking a game of chicken, I say look at what Tyson Foods insiders are doing.  Five insiders took advantage of the steep share price drop on Q1 earnings disappointment.  Albemarle insiders continue to bet on the lithium economy. If you’re inclined to bet on default, take a look at the PRA Group’s earnings disaster and the new CEO purchase.  Debt collection could be a hot new growth market. You can be … Read more

When it comes to Financial Advice Bard and Chatbot GPT are just a new twist on the Old Shell Game

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All the buzz and the action are about Chatbot GPT, Bard, and large language model generative text and imaging capabilities.  I’ve heard this hailed as the most important invention since electricity and fire. I want to call a giant timeout and bubble alert.  As you know, as a first step in my analytic process, I assiduously track insider buying and selling using paid services like Secform4.com to scrape free information off the SEC Edgar website. I try to fathom what the insider sees that Mr. Market may be missing.  So I asked Bard (Google’s beta AI offering) what insider filings … Read more

Insider Buying Week 5-12-23 Prelude to Something but What?

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Insiders are coming out in force to buy regional and community banks.  Normally significant insider buys are met with a predictable market response, a positive bounce between 3%-5%. This is not happening.  There is no urgency, as the stocks, for the most part, are lower than when the “informed investor” purchased the shares.  I like to believe that no one knows more about the business than the people running it, but banks may be a glaring exception to my dogma.  First of all, banks’ balance sheets are complicated and notoriously obtuse.   2008 should serve as an indelible reminder of that. … Read more

Insider Buying Week 5-5-23 Banking Blood Bath is it time to Buy?

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Insiders came out to play last week. It was not pretty, but insiders are bottom fishers, as a rule. They buy in force when prices are down when they perceive a bottom.  Regional bank insiders were all over the field scooping up prices that haven’t been seen since the Pandemic lows. Unfortunately, most of it was in regional bank stocks. Bank stocks are notoriously difficult to understand. First of all, they are highly leveraged, between 5-10% Tier 1 capital ratios which is the ratio of a bank’s core tier 1 capital—its equity capital and disclosed reserves—to its total risk-weighted assets.  Usually, that … Read more

Banks rising from the Dead?- not so hot for the Greens Insider Buying Week 4-28-23

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Insiders continue to buy regional and community banks. In most likely a classic case of the baby being thrown out with the bathwater, the KRE, regional bank ETF, showed signs of bottoming but Microsoft and Meta stole the limelight with better-than-expected quarterly earnings. It hasn’t been a good week for the Greens. First, the Chilean government decides they are going to nationalize the country’s lithium reserves. Chile is the world’s second-largest producer of metal essential in electric vehicle batteries. Enphase, the leading inverter and one of the leading battery suppliers to the solar panel industry, swooned 15% on lower-than-expected earnings … Read more

Insider Buying Week 4-21-23 Lithium Stocks Crash, Director buys more Lockheed Martin, and the Curious Case of Domo

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Reuter’s headline news Friday that Chile is nationalizing the vast lithium deposits sent Albermarle and the rest of the lithium economy into a tailspin. More than half of the estimated global lithium resources are located in the salt flats of Bolivia, Chile, and Argentina, much of that in Bolivia.   For the time being, lithium stocks are uninvestable. Think Casear Chavez and Chevron’s disastrous write-offs in Venezuela.  It will be interesting to see if there is any insider buying in the world’s largest public producer, Albermarle.  Perception usually trumps facts when it comes to stock market investing.  The repercussions of this … Read more