Million dollar insider purchases accelerate amid Coronavirus bear market.


There is an old saying — in reality a curse — supposedly of Chinese origin: May you live in interesting times. Well the last three weeks have been extraordinarily interesting. Amidst the backdrop of an expanding global pandemic, and an oil price war, the S&P 500 yesterday fell into bear market territory with a 20% drop from record highs hit on Feb. 19. Amid the extreme volatility, and drumbeat of bleak news, the number of million dollar insider purchases has begun to accelerate. The smart money is beginning to see value.

As we wrote on March 2, for the week ending Feb. 28, the WhaleWisdom Weekly Insider Sell vs Buy Ratio had yet to demonstrate the overwhelming insider buying seen during major correction bottoms since 2008. However, after the subsequent bloodbath in equities, the pace of insider buying has increased. While the Insider Sell vs Buy Ratio is a weekly indicator, through Wednesday it stood at 0.25. Should it close the week at these levels, it would be very close to the most extreme levels of insider buying seen during October of 2008.

Insider selling is most always greater than buying. Insiders are widely granted stock as employment compensation, so selling normally outpaces buying. And of course: Insiders may sell stock for any number of reasons. But they buy for basically one reason: They think they’ll make money. Insider Sell vs Buy Ratio readings less than 1.0 are unusual, and indicate that very well-informed officers and directors broadly view their own companies’ shares as undervalued. WhaleWisdom weekly Insider Sell vs Buy Ratio is on verge of a buy signal

WhaleWisdom weekly Insider Sell vs Buy ratio. Lowest reading since 2008 was in late Nov. of 2008. Through Nov. 11, 2020, the reading was near all-time lows, suggesting wide buying by corporate insiders.

Of course there’s nothing magical about million dollar insider purchases, or a bullishly low insider ratio — stocks can still go down significantly. When the ratio hit its all time low for the week ending Nov. 21, 2008, the market didn’t bottom until early March, dropping another 20%! However, when the ratio touched 0.44 for the week ending March 13 of 2009, that reading coincided closely with the low of the great recession bear market. Insiders are value buyers — they aren’t timing the market, but rather buying their stock when they believe it sells at a discount to fair value. The panic/irrational selling of a bear market can drive share prices well below fair value.

If you were an officer or director at a public company, and you strongly believed your shares were undervalued, what would you do? You’d buy your stock. And what if you thought the shares were very seriously undervalued? You’d buy your stock aggressively. When markets decline and investors panic-sell, we begin to see large insider purchases as insiders’ conviction increases. Below are the million dollar insider purchases by officers and directors filed so far this week.

Use these filings as a starting point for further research. And remember, insiders are often early — scale you buying into price weakness. Have a plan. Manage risk!

Million dollar insider purchases by Officers and Directors March 9 – 11.

Most recent filingCompanySymbolIndustry# InsidersLast Trade Total Shares Avg. Price Total 
10-Mar-2020American Homes 4 RentAMHREIT – Residential209-Mar-2020          1,679,958 28.12 $      47,245,956
11-Mar-2020Trinet Group, Inc.TNETBusiness Services110-Mar-202027205952.28 $      14,224,469
10-Mar-2020Tcg Bdc Ii, Inc.CGBDOther306-Mar-2020             579,446 20.42 $      11,832,287
10-Mar-2020Energy Transfer Equity, L.P.ETOil & Gas Pipelines209-Mar-2020          1,308,000 7.79 $      10,188,135
09-Mar-2020Nielsen Holdings plcNLSNInformation & Delivery Services106-Mar-2020             250,000 16.33 $        4,082,500
09-Mar-2020Freeport-McMoRan Copper & G…FCXCopper205-Mar-2020             335,000 10.02 $        3,358,326
11-Mar-2020Amneal Pharmaceuticals, Inc.AMRXOther310-Mar-20208500003.71 $        3,156,973
10-Mar-2020Healthways Inc.TVTYSpecialized Health Services209-Mar-2020             265,405 11.51 $        3,053,608
09-Mar-2020Qurate Retail, Inc.QRTEAComputer Peripherals106-Mar-2020             550,000 5.44 $        2,994,575
10-Mar-2020NuStar Energy L.P.NSOil & Gas Pipelines510-Mar-2020             236,000 12.34 $        2,911,982
09-Mar-2020Trinet Group, Inc.TNETBusiness Services106-Mar-2020               52,599 52.84 $        2,779,331
10-Mar-2020Revolve Group, Inc.RVLVOther209-Mar-2020             196,000 13.11 $        2,569,002
11-Mar-2020PNC Financial Services Grou…PNCMoney Center Banks109-Mar-202024415102.39 $        2,499,730
10-Mar-2020Gates Industrial Corp PlcGTESOther110-Mar-20202504009.24 $        2,314,888
09-Mar-2020Newell Rubbermaid Inc.NWLHousewares & Accessories306-Mar-2020             145,000 14.46 $        2,096,574
10-Mar-2020Western Midstream Partners,…WESGas Utilities210-Mar-20203507005.86 $        2,053,986
11-Mar-2020Range Resources Corp.RRCIndependent Oil & Gas210-Mar-20209181282.19 $        2,014,271
10-Mar-2020KAR Auction Services, Inc.KARAuto Dealerships309-Mar-2020             111,355 17.52 $        1,951,490
11-Mar-2020Drew Industries Inc.LCIIGeneral Building Materials209-Mar-20202000087.19 $        1,743,900
10-Mar-2020Planet Fitness, Inc.PLNTSporting Activities206-Mar-2020               26,000 63.45 $        1,649,591
10-Mar-2020First Financial Bankshares …FFINRegional – Southwest Banks310-Mar-2020               67,292 24.17 $        1,626,648
10-Mar-2020AMERCOUHALRental & Leasing Services109-Mar-2020                 5,101 311.25 $        1,587,704
10-Mar-2020Assured Guaranty Ltd.AGOLife Insurance109-Mar-2020               39,632 37.82 $        1,498,882
09-Mar-2020Upwork Inc.UPWKOther105-Mar-2020             150,000 8.04 $        1,205,610
09-Mar-2020Myos Rens Technology Inc.MYOSOther405-Mar-20209297531.21 $        1,125,001
10-Mar-2020Hexcel Corp.HXLAerospace/Defense Products & Services109-Mar-2020               20,000 55.96 $        1,119,280
10-Mar-2020Lincoln National Corp.LNCLife Insurance210-Mar-2020               29,900 35.27 $        1,054,694
11-Mar-2020WhiteHorse Finance, Inc.WHFAsset Management209-Mar-20208160012.85 $        1,048,400
10-Mar-2020Williams Companies, Inc.WMBOil & Gas Pipelines410-Mar-20206890015.17 $        1,045,178
10-Mar-2020Lowe’s Companies Inc.LOWHome Improvement Stores106-Mar-2020               10,000 103.86 $        1,038,595
11-Mar-2020AramarkARMKSpecialty Eateries111-Mar-20204000025.82 $        1,032,652
11-Mar-2020The Home Depot, IncHDHome Improvement Stores109-Mar-20204745210.78 $        1,000,151


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