A Rare Insider Purchase at FuelCell Energy – Insider Weekends

The insider purchases last week yielded an interesting crop of companies. There were purchases of two biotech companies by RA Capital Management, two insiders of TSMC picked up shares in the middle of this bull market for anything to do with semiconductors, a cluster of insiders of a bank that underwent a recent mutual conversion bought shares and the CEO of Conagra Brands put a little over half a million dollars of his own money on the line.

We covered RA Capital and their purchases of Parabilis Medicines (PBLS) and Artiva Biotherapeutics (ARTV) in an Insider Weekends article last month and so I decided not to revisit them again for this Insider Weekends article.

We also covered the opportunity thrift or mutual bank conversions in a January 2024 Insider Weekends article when discussing purchases by a cluster of insiders of NB Bancorp (NBBK). The stock was trading at $13.97 back then and currently trades at $22.43. The purchases by the insiders of Rhinebeck Bancorp Inc (RBKB) last week reminded me of our thesis related to NB Bancorp, where we wrote:

“Thrifts, or mutually owned banks, are banks where depositors own the bank’s capital. Unlike a typical bank, where the institution is owned by and responsible to shareholders, a mutual bank (like Needham Bank) is owned by the depositors who don’t have voting rights in operations. When one of these banks chooses to go public, it is considered to be a mutual-to-stock conversion, otherwise known as a demutualization or thrift conversion. In the IPO, depositors (and insiders of the bank) are the first ones to subscribe to the offering and finally own the capital in the bank.

Unlike other IPOs where insiders often sell when the company goes public and not all IPO proceeds go to the company, the capital in a thrift conversion goes directly to the bank. Due to the nature of the transaction, you’re essentially buying into the thrifts at a discount when they go public, which is why Peter Lynch and other investors like Ed Thorp were/are fond of the thrift conversion space – often depositing money at small banks across America with the hope that a thrift conversion would happen eventually. Ed Thorp discusses going around the country and opening accounts at thrifts in his excellent book A Man For All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market.

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