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  • Taking Some Profits In Celsion [View article]

    With a potentially stock-moving event imminent, I would be a bad fiduciary for my clients to handcuff myself to promise not to trade within the next 72 hours. If there’s a spike, I may have to trim holdings as prudent portfolio management insists. If there’s a plunge, I may choose to take the loss or try a short-term trade depending on the news. Such actions follow naturally from what we said in the article itself.

    But your question seems to assume that we could—or think we could—move a market with our opinion, and that we would try to use such immense power to get a better entry or exit point. We have no such pretense even if you do.

    For example, the sentiment in yesterday’s CLSN article was voiced in our InsiderInsights Newsletter over two weeks ago, and on a TV appearance over one week ago. We also updated CLSN often in our InsiderInsights service last fall discussing when taking profits would be prudent. Our decision to do so was made and fist voiced on January 4th. That hasn’t stopped CLSN trading up a bit since then. And thank goodness it didn’t. We are still long the stock. We want it to go up.

    But let me finish by adding that you are expecting an awful lot from people whose free articles you read, if you expect that hoop to be jumped through by any SA contributor—especially a professional contributor. Even without CLSN’s imminent threat of volatility, I could never allow our content to check a box saying we won’t trade a position in the following three days. Our fiduciary duty is to paying clients, not readers of the small subset of free content from InsiderInsights we allow on the Internet.

    If that seems harsh, so be it. I can’t respond otherwise. I further can't see how us checking that box would make our opinions any more or less valid or useful, and any comfort you feel from reading articles from authors who do check that box is likely unwarranted.

    Jonathan Moreland
    Director of Research
    Insider Asset Management llc
    Jan 17 10:41 AM | 2 Likes Like |Link to Comment
  • Taking Some Profits In Celsion [View article]
    This is just ridiculous. Did you even read our article? Our article was focused on prudent risk management, and, in the end, positive on the stock from here.

    But thank you for reminding me why I don't allow our subscription InsiderInsights content to be down streamed on SA very much. The good is far outweighed by the bad when anonymous guys like yourself have too much time and too little thought behind your posts.

    Jonathan Moreland
    Director of Research
    Jan 16 03:19 PM | 2 Likes Like |Link to Comment
  • Long Mako Surgical Alongside Insiders [View article]
    Yeah, it always seems ominous when stocks trade poorly into quarterly earnings events. But then I've seen poor trading that turned out to be right and wrong, and I've seen good trading into earnings that turned out to be wrong and right.

    We made our bet on Q3, and will win or lose on what happens in those numbers and guidance. The trading before hand isn't a reliable enough indicator for us to second guess that bet.

    MAKO isn't as high a risk/reward position as a biotech waiting for an FDA decision, but we still rate it high. Nobody should be in this stock thinking it owes them to spike higher after Q3, or be over weight the position. In our InsiderInsights Newsletter, MAKO is one of 29 positions at this time. We also hold a higher-than usual cash balance going into this earnings season.

    As always, just my $0.02.
    Oct 17 08:44 AM | 2 Likes Like |Link to Comment
  • Insiders Persistent At Celsion [View article]
    Hi Doug.

    I’m afraid I have to forego keeping our sidestring going on this board. We answered at first because we thought leaving your comment of how worthless insider data was unanswered would show a lack of commitment on our part. But I’m beginning to see a pattern of straw-man arguments and not so subtle (and misdirected) digs in your comments--not the core of a valuable discussion. So I feel it prudent to sign off sooner rather than later.

    Given that you seem to dislike both insider activity as an indicator, and CLSN as a potential high-risk/high-reward punt, I don’t quite know what your goal is on this comment board. We all know that CLSN is a high-risk/high-reward stock, and that any investment process or data stream is not perfect. But I think we relayed both those points pretty well ourselves in the actual article.

    In the end, I’m sorry your extensive investigations have come to a different conclusion regarding the profitability of using insider activity than a long body of academic studies and (more importantly to me) our own experience using the data as a first screen. InsiderInsights’ body of work is substantial, well documented, and well considered. I will let it, and our previous comments, stand on their own in defense of our approach and reputation.

    I’ll also leave it to others here to answer (or not) any further commentary from you. There is a real string going on specific to CLSN, and I hope that continues.
    May 29 09:47 AM | 2 Likes Like |Link to Comment
  • Insiders Persistent At Celsion [View article]
    Hi Gentlemen. Jonathan Moreland at InsiderInsights here. I was told by the marketing guys that I should join this comment string yesterday after Douglas’ first comment. But I see that the string has taken on a life of its own. Still, I think it may be useful for me to add some points and opinions to the very thoughtful and heartfelt commentary already here.

    Douglas, let me try to surprise you by first agreeing with several of your points. I agree that “deploying capital should be based on one's usual stock evaluation criteria, not insider transactions”. I agree that “there are no shortcuts. Investing based on insider activity is, like everything else in this business, a lot of hard work”. I also agree that most insider stories on free web sites tend to relay news more than actionable investing advice, and that blindly buying into stocks mentioned in such newsy stories (usually pointing out high dollar value transactions) can be outright dangerous.

    The biggest mistake I see investors make in using insider data is to assume that any large dollar transaction must be significant, and they invest right away based on a seemingly big insider transaction. Anyone who thinks this data stream gives up profitable investing intelligence that easy gets what they deserve.

    The second biggest mistake I see is that people assume that insider data is not useful at all. This second mistake often results from an investor’s experience of losing money after making the aforementioned first biggest mistake. This mistake may also be based on the seemingly logical view that, if the insider really did have some insight about their stock when they traded, it would be illegal--another canard.

    Douglas, I’m not sure what in your experience has generated your conclusion that “99.9% of insider buying has zero value” and that it’s all a bunch of window dressing, but if your conclusion is based on returns from stocks featured in the same sort of free insider pieces you correctly identify as not particularly useful, then I think we’ve found at least part of the answer.

    Having spent the past 25 years analyzing insider behavior for investment intelligence, I’ve come to a much different conclusion. I’ve come to appreciate insider data as the best first screen I know for determining where I should focus my finite and very valuable (to me at least) research time. I’m a fundamental analyst by training. But with 10,000 potential stocks to buy for myself or clients, where the heck do I start? Digging into 10ks and Qs, calling management, reading related publications, building earnings models—it’s a tremendous amount of work. And I long ago identified that insider data is that effective way for me enrich the quality of firms I put into my fundamental research process. I waste less time researching stocks that I can’t act on, and improve my returns to boot.

    So it may sound odd for this insider guy to say, but I actually don’t buy stocks because insiders do. I buy them when my fundamental process identifies an opportunity that I’ve concluded has an attractive risk/reward profile. Of course, I never would have put the time into finding out if the stock was fundamentally attractive if not for the significant insider signal, but the insider activity is not the trigger. It is the first screen. So when my stocks don’t do as I expect, I don’t blame the insider data as being useless. I blame my fundamental research as being faulty, or just accept that no stock is a sure thing, and as long as I have more winners than losers and have winners that go up more than the losers go down, I’m doing well.

    So, Douglas, we don’t seem far apart on that point. But we do seem to be far apart on what constitutes a significant insider signal—and I believe that’s where your disenchantment with this data stream has evolved. You dismiss the Celsion activity as window dressing, but then you state adamantly that an example of extraordinary insider activity would be “C-level executives buying shares on the open market in multiples of their salary”. Unfortunately, my research has found that even that is too simplistic a rule of thumb to hang a significant insider signal on. It is the definition of making the “biggest mistake” I mention above.

    The analogy I’d use for this “biggest mistake” would be someone who calls himself a growth investor, and who expects to make big bucks by blindly buying all the stocks of firm’s that post 100% year-over-year EPS growth. But what is the nature of that seemingly significant piece of growth data? Did EPS increase from $1 to $2, or 1 cent to 2 cents? What is the quality of the earnings? Are their extraordinary items to back out or add? What is the trend in earnings? Is this a one-off bonzo event that isn’t likely to be repeated?

    This extra analysis of "growth" seems obvious to us all. But why do so many investors expect insider data not to need the same effort?

    Analyzing insider data for significance is just as involved, but most investors neither pay up for the value added insider data and analytical tools to asses it, or put in the extra time they should with any free data they get hold of. There is an entire level of analysis to do based on numerous aspects of an insider trade coupled with several behavioral factors. Dollar value is just one (and arguably the simplest) of the factors we incorporate into our final “score”.

    In our weekly Newsletter, we have data tables, a “New Finds” list of the subset of those stocks from the data tables that met our threshold of insider significance, and an ongoing Recommended List of stocks that passed both our insider and fundamental criteria. Michael Dell’s series of purchases of $100 million and $150 million over the past few years absolutely hit the data tables. But DELL never even made it to our New Finds tables. And anyone who bought DELL based on that c-level exec’s big buys deserved to lose money. But the fault is that of the investor who was too lazy to do the work needed to use that insider data properly, not the fault of the data.

    Was Michael Dell window dressing? I don’t know and I don’t care. You seem obsessed with window dressing, but I’ve met and talked with some of these execs and directors who have made mere $10k purchases at microcap firms. They just don’t have the money you think they do. $10k is real money for a lot of them. And when you see 5 years of transaction history for them that’s littered with $1k and $2k buys, and there is suddenly a $10k buy, that’s significant behavior. You have to relate the size (share wise and dollar wise) to the individual making the trade—not have a blanket rule of thumb about a set threshold of dollar value that is significant in all cases.

    In any case, I’ve found that window dressing scores similarly to other much more numerous transactions that are just plain “noise” when it comes down to it, and is fairly easy to discount.

    It’s late. I’m starting to ramble. And I have a newsletter to put out, a (second) book to write on this subject, and over 100 stocks to analyze for insider significance given the peak Form 4 filing season we’re in after Q1 trading windows have opened. So I’ll leave this comment with a couple stats:

    The Recommended List of our InsiderInsights Newsletter has 502 closed positions since inception in late 2001, and they have averaged a gain of 9.8% over an average holding period of 25.7 weeks. Of those 502 closed positions, 64 are of stocks in the biotech/medical device industries. This subset average 17.2% gain over a 26.5 week holding period. The original stock picking stemming from insider activity is just a part of the out performance, though. Managing a biotech position after it is selected is nearly as important to the final success (or not) of the position. And that has nothing to do with insiders most of the time.

    You’re not going to see numbers like that in any spreadsheet of stocks plucked from insider columns on free websites. Your challenge to PK to do that is setting up a straw man. But you know that. You intimated yourself that you get what you pay for. InsiderInsights is a service that serves a large institutional base right now. To be blunt, our presence on free sites is a cost to us, taken from our marketing budget. We are trying to add value to the retail investor through these efforts as we also try to educate and increase our exposure to this market. But in the end our best and complete work will always have to paid for. It cannot be otherwise. We have bills to pay as well.

    Regards, and much respect to all that have commented. There's obviously a lot of experience behind everyone's opinions here. And everything I've written is, as always, just my $0.02 based on my experiences.
    May 24 10:56 PM | 2 Likes Like |Link to Comment
  • Staying Aboard Air Transport [View article]
    No. Not right. Just pointing out arguably under-valued stocks that insiders are buying themselves in case you don't think the worst will come to pass. I'm hardly cheerleading.

    But you seem to expect the worst--and you may not be wrong. So the relevant portion of this piece for you appears to be:
    "ATSG's chart will no-doubt turn ugly in a hurry if Europe's debt problems turn contagious, but so will those of most every stock. If that's you're major concern, you probably aren't and shouldn't be looking for any new long ideas."
    May 22 05:31 PM | 1 Like Like |Link to Comment
  • Top Insider Trades May 14, 2012: Repros [View article]
    Hi Nick.

    I don't know the basis of your "pumper" conclusion. Perceptive has been in the stock long enough to qualify for long-term capital gains if it decided to take profits. It is also publicly disclosing its trades, not hiding them.

    If disclosure is deemed "pumping", then you'd be questioning the whole basis for the Securities Exchange Act of 1934. At the time that very forward-looking piece of legislation was passed, the concept of disclosure was viewed as desirable, and that "sunshine would be the best disinfectant" for at least some of the nasty illegal trades insiders had been undertaking leading up to the 1929 crash.

    That said, even if you believe the Perceptive signal is legitimate, you would still only follow insiders into the stock if you believed the fundamentals and future prospects of Repros look attractive. You obviously don't, and that's fine.

    At InsiderInsights, we pass on plenty of stocks that have significant insider signals (by our scoring metrics), but don't pass subsequent fundamental and/or technical scrutiny. In the end, we use insider data as our first screen to narrow down the names we spend our finite time analyzing. But as a first screen, it is the best one we know of to identify the most promising potential investments among the thousands of issues we could purchase or short on any given day.

    As always, just our $0.02.
    May 15 08:59 AM | 1 Like Like |Link to Comment
  • Top Insider Trades May 9, 2012: Sirius Buying [View article]
    Whoa guys. There's no conspiracy in the forward contract. Forward contracts are well-established financial instruments that simply lock in a future transaction between agreeing counterparties. The price and date of the transaction are negotiated by the counterparties, and the agreed-to terms are put in the contract. Sure, there is counterparty risk (eg. one party could back out), but I doubt that's a risk here. And though it certainly would be interesting to know who the seller is, the fact that they are unidentified is unremarkable, and also not a conspiracy.

    The main bit of investment intelligence I gathered from the forward contract was that there was obviously a willing seller of so many SIRI shares at the then market price. Since Liberty didn't have to offer a premium for the large block, it seems to indicate just how willing the large shareholder was to get out.

    Reasonable minds can differ on that interpretation, but the bottom line seems to be that it's a good thing for current SIRI holders that Liberty has a huge appetite for these shares given the obnoxiously large number of shares outstanding there are.

    As always, just my $0.02.
    May 10 05:54 PM | 1 Like Like |Link to Comment
  • Insiders Are (Finally) Buying Clean Energy [View article]
    Hi Cool & Happyjoe.

    Didn't intend this to be a hatchet job. I do point out that the insider profile is finally bullish. But I also have to point out the finer points of the insider history that make the bullish insider rating weaker than many others we've seen lately. That's owed to the cold, hard statistics of the insiders' past returns--the details of which we happen to generate more of than other insider websites.

    It seems any disagreement we have on whether to buy CLNE right here and now comes down to differing opinions of the firm's fundamentals and the timing of a potential turnaround. Reasonable minds can differ there.

    But after years of not even needing to consider CLNE when I set out to invest in the fabulous trend of American energy independence (because of the insider selling), at least the stock is now on my radar. I'm very interested to see how next quarter's financials come out.

    I'd love to see CLNE's business model pan out for all the reasons I think the U.S. should take better advantage of its resources. It's just been so disappointing for so long...with the lack of support from the U.S. Congress to incentivize use of natural gas in vehicles not CLNE's fault.
    Mar 11 04:59 PM | Likes Like |Link to Comment
  • Playing Momentum With Insiders [View article]
    Yeah, this is tougher to read than the tables in our previous stories. Hmmmm. I believe it's due to this table having more entries.

    I can still make it out even so, but I just right clicked the image and pasted in a Word file with no margins. The table takes up a normal page (as intended) this way.

    We'll take table length into consideration in future articles so this annoying extra step isn't necessary for some of you. Seems a shame to pare down this table now, though. We'll leave it as is, and hope this instruction helps those who need it.
    May 16 01:25 PM | Likes Like |Link to Comment
  • Insiders Opting In [View article]
    Hi Alerts.

    I have to agree with you. CLMS demotion underway!

    May 9 07:33 AM | Likes Like |Link to Comment
  • Insiders Opting In [View article]
    Hi HP.

    Don't lump all insider services together. I headlined the February 8, 2013 issue of our InsiderInsights Newlsetter with an editorial titled: "Ratio Wise, Dollar Foolish".

    It began:
    "The usual suspects have been generating alarmist stories over the past week about how a surge in insider selling is indicating that the market is set for a big pullback. These stories are based on dollar-value ratios of insiders buying and selling, and there is the possibility they could turn out to be prescient. More likely, however, is that going to cash right now because of these stories will be a mistake."

    After a thousand or so words backing up that assertion, I concluded:
    "we remain fully invested instead of in “Chicken Little” mode."

    I've been analyzing the behavioral data stream that is insider data for over 25 years, and supply data and independent research to hedge funds, institutional investors, brokers, and the like. Individual investors depending on only free sources of insider analysis will always be at a disadvantage.

    To a great extent, the democratization of investment advice has led to its mediocratization. That is particularly true with insider analysis. We're trying to raise the bar on Seeking Alpha. But we're only repurposing a fraction of what our paying clients get. We can't afford to give more away because it It takes real time, money, and experience to both program our value-added data feed, and mine it for investment intelligence.

    Your opinion that "This is totally meaningless data" tells me that you have been relying on only the free insider sources that (quite literally) litter the Internet.

    Academic studies, the experience of professional investors, our own track record--and just plain common sense--should tell you that analyzing the behavior of corporate executives relays valuable investment intelligence. But it takes real work.

    No self-respecting growth investor would blindly throw money in any stock with 100% EPS growth in its latest quarter. Was that growth $1 to $2, or 1 cent to 2 cents? It matters. And what of the quality of the earnings? What do the footnotes on the income statement and balance sheet indicate?

    The Form 4s insider report their trades on also have footnotes--which our computers scour in real time as we harvest the data. Our scoring paradigms also rate the quality of an insiders track record in more detail than the mere average return as well. But even after all that value add, we still roll up our sleeves and look at the histories with our own eyes.

    The end result of all our insider analysis is that we kept our paying clients way long starting last November up until now. We're remain in only 5% in cash as I write, while being wary of the many forces that could yet upset this latest bull run.

    We make it look easy. But it isn't. And while the conclusions we form from our top-down and bottom-up analysis of insider data isn't always right (hey, who is), the data itself is far from "meaningless".

    As always, just my $0.02.

    Jonathan Moreland
    Director of Research
    May 8 11:11 PM | Likes Like |Link to Comment
  • Insiders Opting In [View article]
    Actually Tony, I hate to sound promotional, but our own site has all the value added free and subscription-based insider data and independent research you could want.

    I've never heard of the site Turner suggests. Room for everybody I guess, but I'll bet they don't go into the transactional detail we do to be able to generate ideas as in this Opting In story.

    Anybody can parse the XML from the SEC's feed these days. We focus on adding value to it for investors. There is so much noise in the data. Either you take the time to research the transactions yourself, or you pay a reasonable bit of money to have a service like ours do it for you.

    But check out our Free Insider Data at if money is an issue. The data is real-time, and we've tried to make the output of our ticker searches and Top 20 screens as useful as possible at a glance.

    As always, just my $0.02.

    Jonathan Moreland
    Director of Research
    May 8 10:28 PM | Likes Like |Link to Comment
  • Taking Some Profits In Celsion [View article]
    We would appreciate if you would leave us our of your conspiracy sir. You are way off base bordering on abuse. My name is below. What is yours?

    Jonathan Moreland
    Director of Research
    Jan 16 02:32 PM | Likes Like |Link to Comment
  • Taking Some Profits In Celsion [View article]
    Odd price action indeed. I don't think our article caused it. It obviously shouldn't have. The trading does seem to indicate the volatility that will ensue after results are released--up or down. As the article states, we still have some exposure, so we're hoping for the best. But if it is down, trading the inevitable overreaction may be a play judging by whatever spooked investors today.

    In the end, it doesn't matter what anyone writes about CLSN at this point. The results will be what the results will be.

    As always, just my $0.02.

    Jonathan Moreland
    Director of Research
    Jan 16 02:22 PM | Likes Like |Link to Comment