Weekly Insider Trading, September 23

|
Includes: CLMT, CWH, ODT
by: G-Stock
Summary

Camping World - CEO Marcus Lemonis further increasing his stake in the company.

Odonate Therapeutics - CEO Kevin Tang continues to make huge open market purchases awaiting phase III results in 2020.

Calumet Specialty Products Partners - Potentially forgotten stock, insiders are buying steadily and have historically been correct.

Introduction to Weekly Insider Trading (for new readers)

Weekly Insider Trading from G-stock is the result of quantitative screening of insider trading coupled with qualitative checks to produce a list of companies with the most interesting cues. The screening process starts by looking at number and value of insider trades if spread across insiders, their historic behavior, and the value of current trade in comparison to existing shares owned. This produces a list of the most interesting companies to look at. The next step is to filter based on the type of trades and the person trading. Purchases in a new issuance of stock or exercise of options are generally considered of lesser value than an open market purchase. Generally, the more spread across insiders, the better should be the signaling value. Within the insider category, Officers are highest ranked, followed by directors, and >10% owners. That said, nothing is binary and continuous purchases of a >10% owner can be very supportive for price just like buybacks are. So, to summarize, simply looking at transaction values is not enough. Most of the time, insider transactions need to be put in context, quantitatively and qualitatively, only then can such transactions be of value for portfolio decisions.

Please note that the companies presented and information given should not be interpreted as a full picture view or some fundamental analysis of the company. I am merely identifying insider trading patterns and looking at some basic info related to those companies, and if available, adding analysis done in other articles directly linked to the company to better score the value of such insider transactions. I strongly encourage everyone to do their own fundamental analysis of each company before investing.

Types of Insider transaction setup (of course, any position is contingent on other screening factors as well)

Market opportunistic with positive trend, Insiders increasing holdings in a correction in a stock with general uptrend (here I would buy and hold for some time, 1-6 months). Market opportunistic with no trend, Insiders increasing holdings in a correction in a stock with a sideways trend (here I would buy and sell on a reversal to mean or within 3 months if the stock is not moving). Turnaround bet, Insiders increasing holdings in a stock in a sideways or downwards trend (higher risk, smaller position, event-driven holding, max 6 months, smaller size).

Overall Weekly Market Introduction

As for the overall market direction, in the most recent article (S&P then at 2880), I wrote that I believed in buying dips into a rally next week (which was last week). S&P ended the week at 2930 after trading as high as 2940 intraday.

For the coming week(s), there are seasonal headwinds as well as a sentiment picture that is starting to become less extreme to the bearish side (which I interpret as making the wall of worry less of a positive factor from a contrarian standpoint). The short-term trader can probably pick up the S&P 2-4% lower or so at a time the coming weeks, which will then reverse into revisiting the highs before year end. I would not try to time my core long positions with this type of market move though, but rather 1) keep some cash to take advantage of such a dip and 2) use a small share of the portfolio to do long/short pair trades and some directional bull or bear bets based on short-term positioning signals.

As for sectors, Nasdaq overall looks heavy compared to the S&P, and within the Nasdaq, especially the FAANG names look heavy. Into year end, I am favoring financials. I also think it is time to start averaging into emerging markets. While I do expect trade disputes to continue a long time, especially with China, markets have discounted a lot of bad news and I intend to average into these markets over the next 3 months. Overall, I believe this will be a good time for stock picking and long/short trading, even on index level.

Update of open and closed positions

As of close Friday 21, September, some positions have been closed. In the table below, the most recently closed positions are highlighted and commented to explain the rationale in brief. In addition, the currently open positions have been given some updated comments.

This article's insider trading stocks

I have looked at the SEC reported insider transactions over the last two weeks (report date). The final list includes companies based on the insider activity rank, which might or might not lead to an immediate action.

Company

Ticker

Insider activity

Longer term insider score

Company Fundamentals

Chart Technicals

Type of Setup

Action

Camping World

CWH

+

+

+

0

"Turnaround"

Renewed signal

Odonate Therapeutics

ODT

+

+

0

0

"No trend/Positive"

Renewed signal

Calumet Specialty Products Partners

CLMT

+

+

0

0

"Turnaround"

Buy @ market

Camping World (CWH)

Summary

CEO Marcus Lemonis is stepping up to the plate and increased his holdings by 0.5 M USD. I continue to believe this is a long-term bull case Insiders are buying for the first time since introduction in 2016. According to the CEO, the weakness is due to market misunderstanding the corporate strategy. In the most recent report, they did a better job explaining the situation, but the market has been hesitant. I think this is a bottoming process also due to technical factors. Marcus also admits of making some rookie mistakes during his early years as CEO for a publicly-traded company. He is at least putting his money where his mouth is. The stock is cheap as well and I will follow.

Basic Company Info

Camping World Holdings, Inc. engages in the provision of a comprehensive portfolio of services, protection plans, products, and resources for recreational vehicle enthusiasts. It offers products under the brands Camping World and Good Sam. The company operates through the following segments: Consumer Services & Plans and Retail. The Consumer Services & Plans segment offers services such as emergency roadside assistance, property and casualty insurance programs, travel assist programs, extended vehicle service contracts, co-branded credit cards, vehicle financing and refinancing, club memberships, and publications and directories. The Retail segment offers products such as new vehicles, used vehicles, parts, and service, including RV accessories, and supplies, as well as finance and insurance.

Industry

Consumer Goods

Market cap

737 M

Employees

10k

P/S

0.2

Founded

2016

P/E

-

Website

http://www.campingworld.com

P/CF

14

EV/S

0.9

EV/EBITDA

11.2

Insider Trading

Directors and the CEO bought at $20-22 between May 14th and May 25th. Following the most recent report and silent period, Marcus bought more shares. I wouldn't be surprised to see other insiders follow him. All of them increased their holdings significantly during 2018.

Name

Insider Type

Trade date

Buy/Sell

Price

Value

Own. Chg

Lemonis Marcus

CEO, 10%

2018-09-14

Buy

$19.74

+$493,480

61%

George Mary J

Dir

2018-05-25

Buy

$20.25

+$50,621

24%

Baltins Andris A

Dir

2018-05-24

Buy

$19.81

+$99,039

28%

Schickli Kent Dillon

Dir

2018-05-24

Buy

$19.96

+$499,060

193%

Baltins Andris A

Dir

2018-05-16

Buy

$21.70

+$108,500

39%

Lemonis Marcus

CEO, 10%

2018-05-17

Buy

$22.68

+$249,458

37%

Lemonis Marcus

CEO, 10%

2018-05-16

Buy

$22.11

+$176,840

36%

Lemonis Marcus

CEO, 10%

2018-05-15

Buy

$21.51

+$258,084

120%

Lemonis Marcus

CEO, 10%

2018-05-14

Buy

$21.29

+$212,930

New

Lemonis Marcus

CEO, 10%

2018-03-15

Sell/Option

$35.51

-$4,616,300

0%

Nuttall Roger L.

Pres, Camping World

2017-12-26

Sell/Option

$45.80

-$1,832,192

-25%

Moody Brent L.

COO, Legal Officer

2017-12-26

Sell/Option

$45.47

-$4,546,796

-38%

Lemonis Marcus

COB, CEO, 10%

2017-11-01

Sell

$40.50

-$4,078,148

-100%

Crestview Partners II Gp, L.P.

Dir, 10%

2017-11-01

Sell/Option

$40.50

-$34,955,712

-4%

Crestview Partners II Gp, L.P.

Dir, 10%

2017-10-30

Sell/Option

$40.50

-$243,000,000

-22%

Lemonis Marcus

CEO, 10%

2017-10-30

Sell/Option

$40.50

-$28,350,000

-2%

Moody Brent L.

COO, Legal Officer

2017-09-29

Sell/Option

$40.46

-$1,426,352

-37%

Nuttall Roger L.

Pres, Camping World

2017-09-28

Sell/Option

$39.38

-$544,069

-23%

Moody Brent L.

COO, Legal Officer

2017-09-26

Sell/Option

$39.42

-$3,030,884

-56%

Wolfe Thomas F.

CFO, Secretary

2017-09-25

Sell/Option

$38.15

-$1,609,107

-48%

Nuttall Roger L.

Pres, Camping World

2017-09-25

Sell/Option

$39.15

-$2,488,724

-59%

Moody Brent L.

COO, Legal Officer

2017-09-21

Sell/Option

$37.94

-$1,332,735

-37%

Wolfe Thomas F.

CFO, Secretary

2017-09-20

Sell/Option

$37.70

-$1,574,770

-48%

Nuttall Roger L.

Pres, Camping World

2017-09-20

Sell/Option

$37.70

-$1,567,905

-48%

Moody Brent L.

COO, Legal Officer

2017-09-18

Sell/Option

$38.05

-$1,913,760

-46%

Wolfe Thomas F.

CFO, Secretary

2017-09-15

Sell/Option

$38.55

-$2,622,440

-60%

Nuttall Roger L.

Pres, Camping World

2017-09-15

Sell/Option

$38.55

-$2,588,391

-60%

Wolfe Thomas F.

CFO, Secretary

2017-07-21

Sell/Option

$32.01

-$133,761

-8%

Wolfe Thomas F.

CFO, Secretary

2017-07-18

Sell/Option

$32.26

-$1,550,889

-52%

Chart and technical

The stock went from $46 to $18 this year and now trades around $22. I chose the weekly chart here to illustrate that we are likely in a bottoming process that could take some time before heading meaningfully higher due to overhead supply given the rapid descent, and I would, therefore, look to buy more on dips rather than chase.

Fundamentals

Revenue growth is solid and gross margins have been mostly stable, slight increase, as well as the EBITDA. The stock is cheap at these levels even with low single-digit growth.

Dec.-17

Dec.-16

Dec.-15

Dec.-14

Dec.-13

Total Revenues

4,285

3,519

3,279

2,635

2,357

y/y %

21.8%

7.3%

24.4%

11.8%

Gross profit

1246

996

899

746

663

Gross margin %

29%

28%

27%

28%

28%

EBITDA

392.8

303.3

264.1

209.7

180

EBITDA %

9%

9%

8%

8%

8%

Net income

28

191

174

124

21

Cash and equivalents

224

114

92

0

0

Free cash flow

518

572

271

253

201

Seeking Alpha and other articles

SA August 2018: Camping World: A Free Gift

SA June 2018: Taking A Gander On Camping World

SA June 2018: Camping World Has Bottomed

SA June 2018: Camping World Holdings: A Diversified RV Business Model That Deserves A Better Multiple

CNBC June 2018: Camping World CEO on recent weakness and here

Odonate Therapeutics (ODT)

Summary

ODT is a recently (December 2017) IPO'd biotech company which so far has seen its stock price move between the IPO price of 24, down to 15, up to 32 and now slightly below the IPO price. Insiders are buying steadily during this consolidation period. Their main candidate is aimed at improving and extending lives of cancer patients by offering oral administration instead of traditional intravenous injections. On top of that also aiming for improved activity against chemoresistant tumors. The results from the ongoing CONTESSA phase 3 study are not estimated to be completed until September 2020, and until then, the stock will probably trade in this range.

Basic Company Info

Odonate Therapeutics, Inc. is a pharmaceutical company, which engages in the development of therapeutics that improve and extend the lives of patients with cancer. It focuses on the development of tesetaxel, a novel chemotherapy agent that belongs to a class of drugs known as taxanes, which are used in the treatment of cancer.

Industry

Biotechnology

Market cap

570 M

Employees

60

P/S

Founded

2013

P/E

Website

http://www.odonate.com

P/CF

EV/S

EV/EBITDA

Insider Trading

Obviously, some insiders participated in the recent IPO, but it seems some of them just can't get enough of these shares given their urgency to buy more only 2-3 months post IPO. The purchases were made just after the Q4 financial report was released.

Name

Insider Type

Trade date

Buy/Sell

Price

Value

Own. Chg

Tang Kevin C

CEO, 10%

2018-09-18

Buy

$19.55

+$1,759,296

1%

Tang Kevin C

CEO, 10%

2018-08-21

Buy

$19.47

+$146,151

0%

Tang Kevin C

CEO, 10%

2018-08-16

Buy

$19.49

+$968,274

0%

Tang Kevin C

CEO, 10%

2018-08-13

Buy

$18.93

+$431,705

0%

Boxer Capital, LLC

Dir, 10%

2018-03-22

Buy

$22.73

+$2,273,153

4%

Davis Aaron I.

Dir, 10%

2018-03-22

Buy

$22.73

+$2,273,153

3%

Tang Kevin C

CEO, 10%

2018-02-28

Buy

$27.42

+$385,182

0%

Tang Kevin C

CEO, 10%

2018-02-20

Buy

$27.17

+$1,061,811

0%

Tang Kevin C

CEO, 10%

2018-02-14

Buy

$22.47

+$2,881,344

1%

Vacirca Jeff L

Dir

2017-12-12

Buy

$23.30

+$23,300

New

Davis Aaron I.

Dir, 10%

2017-12-06

Buy

$24.00

+$9,999,984

14%

Boxer Capital, LLC

Dir, 10%

2017-12-06

Buy

$24.00

+$9,999,984

18%

Tang Kevin C

CEO, 10%

2017-12-07

Buy

$24.00

+$30,999,98

12%

Who is Kevin C. Tang? Summarized he has a lot of experience both from biotech and banking. He should be a person that knows how to bet. He is also making significant insider purchases in Heron Therapeutics (HRTX) and La Jolla Pharmaceutical (LJPC). In January 2017, he made purchases in HRTX @ $12.2, stock now at $28. In LJPC, the purchases are more spread out, but the 2017 transactions were @ approx. $34 and again in 2018, @ 30, the stock is now trading at $30. From this, we can learn that his intentions probably are in the longer term rather than short term and that he will continue to make purchases in ODT going forward, which should support the stock given his size.

Bloomberg bio:

Kevin C. Tang has served as director of Heron since February 2009 and as Chairman since July 2012. Mr. Tang has more than 20 years of experience evaluating, creating and building biotechnology companies that are focused on developing treatments for life-threatening and debilitating diseases and conditions. Mr. Tang is the President of Tang Capital Management, LLC, a life sciences-focused investment company he founded in 2002. From 1993 to 2001, Mr. Tang held various positions at Deutsche Banc Alex Brown, Inc., an investment banking firm, most recently serving as Managing Director and head of the firm's Life Sciences research group. Since August 2014, Mr. Tang has served as a director and the Chairman of La Jolla Pharmaceutical Company. In 2006, Mr. Tang co-founded Ardea Biosciences, Inc. and served as a director from inception through its acquisition by AstraZeneca PLC in June 2012. From 2009 through its acquisition by Endo Pharmaceuticals, Inc. in 2010, he served as a director of Penwest Pharmaceuticals Co. From 2001 to 2008, he was a director of Trimeris, Inc. (acquired by Synageva Biopharma Corp.). Mr. Tang received a B.S. degree from Duke University.

Chart and technical

Given the fundamentals, the time plan for the phase III study, and the technical picture, I would range trade this stock. Let it come down to the bottom of the range and place your bets around 16-18. But watch for Kevin Tang and his buy orders around 18-20.

Fundamentals

The cash position is solid and should last until phase III results unless delayed. Given the lack of revenues, this can be a good range of play driven by news flow surrounding the phase III study.

Dec.-17

Dec.-16

Dec.-15

Dec.-14

Dec.-13

Dec.-12

Dec.-11

Total Revenues

28

3

y/y %

973.1%

Gross profit

-5

-1

Gross margin %

-17%

-19%

EBITDA

-37.6

0

EBITDA %

-135%

0%

Net income

-33

-3

Cash and equivalents

198

3

Free cash flow

-26

-2

Investor presentation Aug 2018

Analyst recommendations

Odonate Therapeutics (Pending:ODT) initiated with Buy rating and $40 (60% upside) price target by Jefferies. Initiated with Outperform rating by Cowen and Company. Initiated with Neutral rating and $27 (8% upside) by Goldman Sachs. Goldman also includes ODT in their bullish biopharma 2018 call on possible M&A candidates (link here)

Seeking Alpha and other articles

A very well written analysis of the company, both with regards to biotechnical aspects and valuation: Disrupting Breast Cancer Paradigms - Odonate Therapeutics (Dec. 18, 2017)

Calumet Specialty Products Partners (CLMT)

Summary

Calumet seems to be a difficult to analyze company from a fundamental perspective. These are usually the best insider trading setups when you have to rely on what insiders are saying, and more importantly, doing, putting their money where their mouth is. The insider trading story is solid and there could very well be a fundamental case hiding behind it as well.

Basic Company Info

Calumet Specialty Products Partners LP engages in the production of specialty hydrocarbon products. It operates through the following, the Specialty Products and Fuel Products segments. The Specialty Products segment produces a variety of lubricating oils, solvents, waxes, synthetic lubricants, and other products for automotive, industrial, and consumer goods; and includes synthetic lubricants used in manufacturing, mining, and automotive applications. The Fuel Products segment involves in processing of crude oil into a variety of fuel and fuel-related products, including unleaded gasoline, diesel, and jet fuel.

Industry

Industry Oil & Gas Refining & Marketing

Market cap

0.5 B

Employees

NA

P/S

0.14

Founded

2005

P/E

-

Website

http://www.calumetspecialty.com

P/CF

P/B

EV/S

EV/EBITDA

33

9

0.6

8.3

Insider Trading

Purely buying. This pattern can be seen in quite a few companies, the important thing to look for is the price action and size of buying over time. In Calumet, there is a positive price action trend over time, so insiders buying are making money. The table below contains all insider transaction over the last 4 years. As can be seen, insiders started buying in late 2016 - after the stock dropped from high 20s to low single digits. If insiders would have been buying also in the high 20s, I would not have attributed as much significance to this consistent pattern of buying.

Name

Insider Type

Trade date

Buy/Sell

Price

Value

Own. Chg

Griffin David West

EVP, CFO

2018-09-14

Buy

$6.42

+$22,181

4%

Griffin David West

EVP, CFO

2018-09-12

Buy

$6.55

+$45,850

8%

Griffin David West

EVP, CFO

2018-09-10

Buy

$6.85

+$40,427

7%

Griffin David West

EVP, CFO

2018-09-06

Buy

$6.36

+$67,449

15%

Griffin David West

EVP, CFO

2018-09-04

Buy

$6.57

+$72,272

18%

Go Timothy

CEO

2018-08-31

Buy

$6.85

+$5,138

0%

Go Timothy

CEO

2018-08-29

Buy

$7.00

+$8,400

1%

Go Timothy

CEO

2018-08-27

Buy

$7.05

+$7,050

1%

Go Timothy

CEO

2018-08-21

Buy

$6.70

+$5,360

0%

Griffin David West

EVP, CFO

2018-08-15

Buy

$6.70

+$33,500

9%

Griffin David West

EVP, CFO

2018-08-15

Buy

$6.70

+$33,500

9%

Griffin David West

EVP, CFO

2017-08-03

Buy

$5.31

+$2,939

1%

Griffin David West

EVP, CFO

2017-07-31

Buy

$5.19

+$42,062

18%

Griffin David West

EVP, CFO

2017-07-26

Buy

$5.24

+$31,968

15%

Griffin David West

EVP, CFO

2017-07-21

Buy

$5.02

+$18,988

10%

Griffin David West

EVP, CFO

2017-07-18

Buy

$4.49

+$3,593

2%

Griffin David West

EVP, CFO

2017-07-13

Buy

$4.14

+$26,371

22%

Griffin David West

EVP, CFO

2017-07-10

Buy

$4.17

+$15,011

14%

Griffin David West

EVP, CFO

2017-07-05

Buy

$4.15

+$37,325

54%

Griffin David West

EVP, CFO

2017-06-30

Buy

$4.21

+$25,242

57%

Griffin David West

EVP, CFO

2017-06-28

Buy

$4.15

+$19,107

77%

Griffin David West

EVP, CFO

2017-06-26

Buy

$4.08

+$24,495

New

Mawer Stephen P

Dir

2017-03-07

Buy

$3.90

+$14,022

14%

Go Timothy

CEO

2017-02-28

Buy

$3.94

+$78,800

22%

Carter James S

Dir

2016-05-26

Buy

$3.70

+$50,320

17%

Go Timothy

CEO

2016-11-25

Buy

$4.25

+$3,268

1%

Go Timothy

CEO

2016-11-17

Buy

$4.75

+$47,495

12%

Go Timothy

CEO

2016-11-15

Buy

$4.76

+$4,559

1%

Fleming Bruce A

EVP - Strategy, Growth

2016-11-15

Buy

$4.33

+$173

0%

William A Anderson

EVP - Sales

2016-11-14

Buy

$4.10

+$82,443

50%

William A Anderson

EVP - Sales

2016-11-07

Buy

$3.40

+$61,731

72%

Go Timothy

CEO

2016-11-08

Buy

$3.90

+$64,720

26%

Fleming Bruce A

EVP - Strategy, Growth

2016-11-08

Buy

$3.39

+$196,617

68%

William A Anderson

EVP - Sales

2016-11-07

Buy

$3.40

+$61,778

72%

Mawer Stephen P

Dir

2016-11-09

Buy

$3.65

+$14,580

30%

Fleming Bruce A

EVP - Strategy, Growth

2016-08-24

Buy

$5.50

+$82,500

21%

Mawer Stephen P

Dir

2016-08-19

Buy

$5.61

+$14,025

23%

Mawer Stephen P

Dir

2016-05-18

Buy

$3.68

+$40,439

New

Carter James S

Dir

2016-05-17

Buy

$3.72

+$99,447

50%

Go Timothy

CEO

2016-05-12

Buy

$3.82

+$95,500

959%

William A Anderson

EVP - Sales

2016-05-09

Buy

$4.07

+$52,910

90%

Fleming Bruce A

EVP - Strategy, Growth

2016-05-09

Buy

$4.08

+$203,750

250%

Murray Richard Patrick II

EVP, CFO

2016-05-09

Buy

$4.01

+$20,050

11%

William A Anderson

EVP - Sales

2016-05-09

Buy

$4.07

+$40,700

54%

Chart and technical

Following the sharp drop in late 2016, price action has been higher with long consolidation periods. We could again be approaching the end of such a period. I view this as decent risk/reward holding the stock for a 6-month period and see if we get another push higher.

Fundamentals

The long-term fundamental picture looks bleak on paper, but there is more than meets the eye in such a simplified view. I recommend reading the in-depth SA article "Calumet Specialty Products Heading Dramatically Higher" for a more in-depth view that explains the fundamental case as well. I view this potentially "hidden" aspect of the stock positive in the sense that it might be a bit forgotten, while insiders continue to show their belief in the company.

Dec.-17

Dec.-16

Dec.-15

Dec.-14

Dec.-13

Dec.-12

Dec.-11

Total Revenues

3,764

3,474

3,930

5,791

5,421

4,657

3,135

y/y %

8.3%

-11.6%

-32.1%

6.8%

16.4%

48.6%

Gross profit

337

213

366

345

253

396

167

Gross margin %

9%

6%

9%

6%

5%

9%

5%

EBITDA

76.8

97.5

194.4

182

219.6

379.1

188.4

EBITDA %

2%

3%

5%

3%

4%

8%

6%

Net income

-102

-322

-153

-125

-12

195

42

Cash and equivalents

164

4

6

9

121

32

0

Free cash flow

-97

-135

44

-63

-122

323

14

Disclosure: I am/we are long CWH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.