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As mentioned in our last Insider Weekends post, we are currently in a “quiet period” before earnings announcements and hence insider activity (especially on the buy side) has slowed down sharply. When looking at the top insider transactions this week, we found that many of the companies listed were either companies we had written about many times in the past (such as Asana, where Founder and CEO Dustin Moskovitz continues to purchase shares via an established 10b5-1 trading plan) or micro-cap companies with incredibly tiny purchases.
For this article, instead of focusing on a specific company, we decided to do a 30,000 foot view and look at the last 90 days of insider purchases. We did this using our Sector Heat Map, which displays a heat map of management insider purchases across all sectors. The heat map only takes management insider purchases into account, excluding any 10% owners or directors who may purchase shares of a company. When filtering this heat map by both the number of companies with insiders that are purchasing shares and the number of total purchases, we found that a few sectors stood out.
The software sector (as is typical) had a large number of management insiders purchase shares (worth $35 million in total). Examples include the two featured companies in our last two Insider Weekends articles, Concentrix (CNXC) and Asana (ASAN). The banking sector was another standout, following the banking frenzy earlier this year and the rather infamous collapse of Silicon Valley Bank. The sector that really stood out with over $40 million in management insider purchases was energy.
The energy sector has featured our Insider Weekends articles many times in the past, but also is incredibly present across all our different strategies. We wrote the following in our April 2023 Mid Month Update about different frackers in our portfolio:
We picked a fracking company, Continental Resources, as a spotlight idea for our August 2020 Special Situations Newsletter following insider purchases by its founder Harold Hamm. The position turned out the most profitable one in the model portfolio when we exited for a gain of nearly 330% when Harold Hamm took the company private in November 2022. The other fracker in our portfolio is Diamondback Energy (FANG), which we discussed in our October 2021 newsletter following a large $2 billion buyback announcement by the company and it is currently up 55% in the model portfolio.