2 Rare Insider Buys in a Frothy Market
With markets near all-time highs, insider buying is hard to find. However, insider selling is quite present.
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Stocks fell across the board Tuesday to begin a new trading week after the Presidents' Day holiday. But there were a couple of things that caught my eye as far as news flow.
Walmart WMT posted better-than-expected fourth-quarter results and rose 3% during the trading day. However, the retail giant did shake up the market by stating inflation was stickier than anticipated in Q4. This confirms what we gleaned from the January CPI and PPI reports last week and my longer-term thesis that the "last mile" on winning the inflation battle is going to take longer than investors were hoping for in recent months. In my view, this belief by investors has been a primary driver of the rally in the markets since late October.
Citigroup also stated it doesn't see a soft landing happening and expects a mild recession in the second half of 2024. Again, that aligns with what I have articulated on Real Money Pro for months, which is also not priced into the market.
With markets trading near all-time highs, I am not finding a lot of insider buying across stocks. However, insider selling is quite present. Probably, the most visible example of insider selling is Jeff Bezos selling billions of dollars of Amazon AMZN stock. That new mansion in Miami Beach is not going to build itself, after all. Of course, Bezos is saving a projected $600 million from moving out of Seattle to South Florida. Bezos is hardly the only corporate insider taking chips off the table these days.
Today, however, we are going to look at a couple of names insiders are purchasing, a rarity in this market. In fact, almost all the insider buying I am seeing over the past month is coming from beneficial owners, not actual officers of companies. Still, there are some exceptions.
WisdomTree
The CEO of WisdomTree, Inc. WT added around $2.1 million to his stake in the New York City-based asset manager last week. WisdomTree is benefiting from the growth of passively managed ETFs as well as index investing.
WisdomTree narrowly beat top-line and bottom-line estimates when it reported quarterly results earlier this month. The company also has the highest organic growth rate among all of its publicly traded U.S. asset manager peers and recently surpassed $100 billion in assets under management. WisdomTree posted profits of $0.37 per share in 2023, and the Wall Street consensus estimate is for EPS of $0.50 in 2024. WT stock currently trades at about $7.30 and has a small dividend payout as well.
Greenwich LifeSciences
The CEO of Greenwich LifeSciences, Inc. GLSI was also buying last week, purchasing some $140,000 worth of GLSI stock in this speculative oncology name in which I own a small position. The shares jumped 15% in trading Tuesday on no news I can find.
Greenwich LifeSciences is working on a combination therapy that would combine its product candidate with Herceptin from Roche RHHBY to treat breast cancer after surgery. After encouraging early-stage data, a pivotal Phase 3 trial has been waiting to commence for some time.
The company gets very little coverage on Wall Street, and it isn't big on press releases either. Greenwich is probably one of the top two or three high risk/high reward names in my portfolio, and it is the ultimate speculative bet. That said, it is encouraging to see some additional insider buying early this year after frequent but smallish purchases in 2023.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider GLSI to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Jensen was long GLSI.
