S/L: 4 New Insider Trades
May 11, 2021
The Insider Report
Trade Alert
Insider buying has been light for the last several months.
As we often see, executives tend to buy less when the market is making new highs and buy more when stocks fall to discounted prices.
Because of this, we have not seen as many trading opportunities as usual.
But the last few weeks have been an absolute blood bath for certain corners of the market, especially tech.
And this selloff has triggered lots of buying.
In fact, I have found 4 new trades for the Insider Report – more than I have ever issued at one time.
To make room in the portfolio, I suggesting cutting a couple underperformers loose.
Two Harbors (TWO) is up a few percent from our entry price but has yet to show any significant upside movement.
Alphatec (ATEC) has also disappointed as we are currently down 18% from entry.
Action to Take: Sell all stock and/or option positions in Two Harbors Investment Corp (TWO) and Alphatec Holdings (ATEC).
With that out of the way, let’s dive right in to the new picks…
Rayonier Advanced Materials (RYAM) is a small-cap stock engaged in the production and sale of cellulose products – a natural polymer commonly used in cell phones, computer screens and filters.
With the exception of a large, well-timed buy last March at the COVID lows, we just saw the largest patch of insider buying in the company’s 7-year history.
Director Charles Adair picked up 5,000 shares on Thursday following a bad earnings report.
The same day, Director Julie Dill went in for 40,000.
The stock is already responding and moving higher on the news.
Both insiders are also first-time buyers.
Action to Take: Buy Rayonier Advanced Materials (RYAM) stock at the market.
We will work an end-of-day stop at $7.00.
Speculators may consider the RYAM Aug21 $10 call options (.RYAM210820C10).
Volume is very light, so use a buy limit order and try not to pay more than $1.00 (currently $0.70 x $0.90).
The next stock is Partners Bancorp (PTRS).
It is a micro-cap commercial bank with operations across Maryland and Virginia.
Despite being a public company for over 20 years, the only insider buys in the firm’s history have all taken place in the last six months.
Insider Michael Clark has made 6 buys since February.
This represents a combined investment of $773,021 and counting.
Every trade was made within a dollar of the stock’s current price, so investors still have the chance to get in alongside this insider.
Action to Take: Buy Partners Bancorp (PTRS) stock at the market.
We will work an end-of-day stop at $7.00.
PTRS does not have options.
Cyclerion Therapeutics (CYCN) is a tiny biotech company developing treatments for orphan diseases through the use of soluble guanylate cyclase.
To be honest, I don’t know what that even means.
But CEO and founder, Peter Hecht does.
And he just loaded the boat with CYCN stock.
Hecht made his first two insider purchases last week.
In two back-to-back transactions, he bought 1 million shares of his company’s stock in his personal account.
This $2,430,000 investment came out of nowhere with no obvious public news event surrounding Cyclerion.
CYCN stock has been forming an acceptance range around this area for almost two years.
So, if we finally see a breakout, the move could be significant.
Action to Take: Buy Cyclerion Therapeutics (CYCN) stock at the market.
We will work an end-of-day stop at $2.00.
Speculators may consider the CYCN Aug21 $2.5 call options (.CYCN210820C2.5).
Use a buy limit order and try not to pay more than $1.00.
The implied volatility of these options is 154%, making them very expensive.
Readers may consider simply buying the stock because of the low price and high volatility.
Lastly, we have Berkshire Hills Bancorp (BHLB).
The stock has been steadily grinding higher for the last twelve months.
It is unusual to see a lot of insider buying at the highs.
So last week’s cluster buy at BHLB is all the more significant.
Three different insiders made direct buys in their personal accounts totaling $522,516.
This represents the largest cluster of insider buying at Berkshire Hills since 2014.
It is unclear if insiders are buying because of privileged information, but the surge in purchases by company executives definitely sets off alarm bells for me.
Bank stocks have been doing well lately thanks to looser capital requirements from the Fed.
So we have an up trending stock in a strong sector with heavy insider buying.
That checks all the boxes for me.
Action to Take: Buy Berkshire Hills Bancorp (BHLB) stock at the market.
We will work an end-of-day stop at $21.00.
Speculators may consider the BHLB Sep21 $30 call options (.BHLB210917C30).
Volume is thin and the spread is very wide, so use a buy limit order and try not to pay more than $1.25.
If you have questions, feel free to shoot me an email: support@hubertsenters.com.
All the Best,
Ross Givens
Editor, The Insider Report