Top insider trades (Wed, Feb 11)

Connor’s Commentary

There were 157 new insider trades filed.

One new insider trade was flagged as High Signal. CEO Watcher Premium subs can see those in the Trade Notes section of this email or the CEO Watcher Premium Dashboard that is linked in the Data Dump section.

As a reminder, if you upgrade to CEO Watcher Premium (link) and find that it isn’t for you, I’ll give you a refund.

• A director at Ares Management (ARES) bought $1.27M of the stock. He's the only insider who has purchased since 2023

• The Exec Chairman at Lesaka Technologies (LSAK) bought $400k of the stock. He bought $9M last month as well

• The President of the Banc of California (BANC) bought $300k of the stock.

  It's his first purchase ever.

• Four insiders at Arec Capital Corp (ARCC) bought a combined $700k of the stock

• A director at NovaGold Resources (NG) bought $200k of the stock. It's his first purchase ever, and it increased his holdings by 100%

• The Exec Chairman at Allegiant (ALGT) sold $34M (2nd largest sale, out of 27).

• 6 insiders have sold $45M of Delta Airlines (DAL) in the last two weeks.

• The CEO at Northrop Grumman (NOC) sold $14.18M of the stock (largest sale ever). The stock is up 54% in the last year.

• GC, CEO, Chief Accounting Officer, and a director combined to sell $16M of Weatherford International (WFRD). The stock is up 90% in the last 6 months.

• Another exec at Chubb Limited (CB) sold the stock. An EVP sold $9M (largest sale ever, out of 24).

• 4 execs at American Express (AXP) have sold $28M of the stock this month

• A director at Lumentum Holdings (LITE) sold $2.6M (largest sale ever, out of 33). The stock is up 550% in the last year.

• Director at Cardinal Health (CAH) sold $919k of the stock (largest sale ever, out of 3)

• and more…

Commentary

A premium subscriber asked about an insider trade that we added to the High Signal List. Their core question was about why it was marked as “high signal” when there was quite a bit of insider selling at similar prices a few months ago.

The company is Standex International (SXI), and it was added to the High Signal List earlier this month.

*Premium subscribers can always see the High Signal List by visiting the CEO Watcher Premium dashboard (linked at the top of the Data Dump section in this email).

Here are the raw notes for the trade (Premium subs can see the raw notes for all High Signal trades in the Discord or in the “feeds” tab on ceowatcher.com).

Here are the insider sales that happened in Q4 of last year at similar prices.

The most pertinent point is that insider sales are not nearly as strong a signal as insider buys (according to our research and virtually all academic research), so we apply a very low penalty for insider selling.

In this case, the purchase met enough of our criteria that the previous selling didn’t affect its score enough to prevent it from being marked as “high signal”.

This insider had never bought Standex before and had not made a public market purchase since 2015, but had made 27 sales in a row.

We call this a “reversal” and have found it to be a very strong signal.

He increased his listed holdings by 30%. We find that you typically want to avoid insider purchases in which the insider increased their holdings by less than 1%, and the larger the increase, the better the returns.

He’d only made two purchases before, but the stock went up a ton in the following year after both purchases. Obviously, two purchases are a tiny sample size, but this is still compelling.

The two main counterarguments are the insider selling in Q4 of last year and our preference for dip buys over momentum buys (the stock was up 30% in the six months before the purchase).

However, we don’t punish momentum buys (we just give bonus points for dip buys), and you could also make the argument that the 3-month pause in selling, followed by a purchase now, is interesting. I don’t really have any good research on this specific scenario, so I don’t have a strong opinion.

As with most insider trades, data for that specific scenario are sparse, so we rely on our best judgment based on the data/research we have.

In this case, we do know that large increases in holdings are a good signal, flipping from selling to buying is a good signal, and insider sales are not a good signal. Only two previous purchases aren’t enough data to be super compelling, but the stock was up 59% and 175% in the following year on both purchases, which is still enough to pique my interest.

This stock may not be of interest to you or align with your investment preferences, but based on the data we have, we believe it is a High Signal Purchase.

Many of our High Signal picks will still underperform, but in aggregate, we expect the performance to be very good.

keep scrolling. top trades + all of the charts and data below

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