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Past Performance: ≈ 50% Annualized Return
This section of the newsletter tracks the past performance of this weekly newsletter. As you will see, on average we have outperformed the S&P 500 from Monday to Friday, market open to market close.
The graph shows the growth of a $10K investment which began on July 20, 2024. You can find every newsletter dating back to July 20th here by CLICKING HERE.
Here is a summary of the past few weeks of performance and a comparison of returns that this newsletter has had relative to the SPY.
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Today’s Reporting Overview
Politician Trading Report
Politician Stock Highlight
Insider Trading Report
Insider Stock Highlight
Executive Trading Report
Executive Stock Highlight
Investing for Next Week (For Paying Subscribers)
Next Week’s Buy Opportunities *Updated Format*
Now includes predicted returns.
Mergers and Acquisitions
Top Investment Ideas
Contrarian Bets
Flagship Portfolio Updates
Micro-Cap Picks
Expected Stock Movements From Options Trading
Politician Trading Report
This report tracks the five most recent politician trades and two large holdings in my portfolio — ETFs NANC 0.00%↑ (which tracks democrat trading) and KRUZ 0.00%↑ (which tracks republican trading).
NANC is down 1.40% this week, 0.24% this past month, and up 30.61% YTD.
KRUZ is down 1.98% this week, 1.09% this past month, and up 18.82% YTD.
Contributing to these gains — over the past 30 days — 13 politicians made 276 trades moving over $20.95 million.
Politician Stock Highlight
This week, we observed transactions from Ro Khanna, who actively traded by buying shares of Nasdaq Inc (NDAQ) and selling shares of Abbott Laboratories (ABT). Despite these activities in well-recognized companies, neither of the trades stands out as an attractive buy opportunity under the current market conditions.
Khanna's decision to buy Nasdaq might indicate a strategic positioning in a leading technology-driven exchange, while his sale of Abbott Laboratories could suggest reallocation or profit-taking, yet neither move suggests an urgent buy signal for our purposes. We recommend keeping an eye on broader market trends and potential opportunities beyond these individual transactions.
Here are the most recent politician trades:
Insider Trading Report
This report tracks the five largest insider buys from the past week and a new ETF in my portfolio — ticker SURE — which tracks insider trading.
SURE is down 1.78% this week, 0.21% this month, and 16.17% YTD.
The top 5 insider buyers bought around $25 million worth of stock.
The top 5 insider sellers sold over $6 billion worth of stock.
Insiders were net sellers this week with an approximate buy/sell ratio of 1:280.
Insider Stock Highlight
This week, our focus is on Aurinia Pharmaceuticals (AUPH), highlighted by insider Kevin Tang's substantial purchase of 500,000 shares for $4.5 million. Despite the significant downturn in the stock year-to-date, this insider activity might signal an undervalued opportunity. Aurinia has demonstrated robust growth metrics, notably in three-year revenue and EBITDA growth rates. However, the company's profitability remains a concern, with a net margin of -10.23%.
Analysts forecast a 15.64% upside to $10.84, but my model is even more optimistic, suggesting the stock is 34% undervalued with substantial potential for growth. My rating stands strong at 8.5/10, reflecting both growth potential and significant insider buying. Nonetheless, given the financial metrics and market volatility, this stock is a 🟡RISKY BUY 🟡. Investors should consider the high growth prospects against the risks associated with the company's current financial health.
Here are the largest trades from this past week:
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Executive Trading Report
This report tracks the five most recent stock trades from company executives.
Total executive ownership in our top 5 companies grew by over 85% — one of the highest growth weeks we have had.
Executive Stock Highlight
Burke & Herbert Financial Services Corp. (BHRB) stands out this week with a significant insider purchase by Julian Forrest Jr., who bought 376,823 shares at $68.75 each. This move reflects a +1% change in ownership, indicating a substantial bet on the company’s future by a key insider.
Financially, BHRB presents a mixed picture. The company maintains a solid net margin of 10.3% and a respectable ROE of 4.49%, showcasing a decade of profitability which bolsters its financial reputation. Despite these positives, BHRB's liquidity and financial strength metrics indicate potential concerns, with a low cash-to-debt ratio of 0.39 and a concerning Benish M-Score of -1.53, suggesting possible earnings manipulation.
The company's growth rank is notable with a three-year revenue growth rate at 2.8% and a future three to five-year EPS growth rate estimated at 35.4%, reflecting optimism about its earnings potential. However, its current momentum rank is low, which might raise red flags about its short-term performance prospects.
Analysts see a modest 12% upside for BHRB, aligning with a steady but unspectacular growth trajectory. However, my model rates BHRB as fairly valued, assigning a 7.4/10 score. The mix of strong insider buying against the backdrop of financial and momentum concerns labels this stock as a 🟡RISKY BUY 🟡.
Let’s take a look at the other executive trades:
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Next Week’s Trades
Key Opportunities and Insights
The TLDR Summary
Quick PSA: We treat the trades as buys on Monday’s Market open and sells on Friday’s Market close.
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