Last week we reported on a cluster of insider purchases at Intel (INTC) and this week saw a repeat performance with four insiders buying shares on the open market. In total we have seen 8 Intel insiders purchase shares during the last two weeks. The stock has been on the move gaining 4.44% since we wrote about it last week, partly benefiting from these insider purchases and partly from the big increase in semiconductor stocks last week. We wrote the following about Intel last week,
Many of us grew up in the age of the “Intel Inside” marketing campaigns and watched the company dominate the industry for several decades. Some might even remember those little gimmicky turbo buttons computers had to give you a little boost of processing power. In the current age of machine learning, cryptocurrency mining and embedded chips requiring vast amounts of processing power, Intel (INTC) has fallen behind both on the chip design and the manufacturing front.
The company hopes to turn things around and hired the well respected Pat Gelsinger as its CEO in February 201. The move was applauded by the hedge fund Third Point that now holds a large stake in Intel. Mr. Gelsinger has an engineering background with a Masters degree in Engineering from Stanford University and was one of the architects of Intel’s 80486 processor in the late 1980s. He brings the right combination of engineering chops and management experience, having previously served as the CEO of VMWare and the COO of EMC. This winning combination worked out great for AMD (AMD) when it hired Lisa Su as its CEO in 2014.
If you subscribe to the theory that we might see a rotation into value stocks from growth in the coming months, then Intel could be a good contender in the value/turnaround part of a portfolio.
Another interesting purchase this week was a cluster of purchases at the reinsurance company RenaissanceRe Holdings (RNR). A cluster of 5 insiders ponied up $4.36 million to purchase shares. Bermuda based RenaissanceRe was founded in 1993 and is one of the top players in the property catastrophic reinsurance segment of the insurance industry. In other words, it is the company that first-line insurance companies turn to to offload some of their risk. It is in this segment that Ajit Jain has made Berkshire Hathaway (BRK.A) a lot of money during the last several decades. RenaissanceRe has a well regarded management team and has a A+ rating from A.M. Best, S&P and Fitch.