Weekly Update: Insiders Keep Buying These Strong Stocks & A Special Announcement
Before we get to this week’s action and our newest trades, we want to make you aware of some improvements we’re making to our publishing schedule starting next week…
First, in order to give our members the best experience possible, we will begin to include our full trade write-ups in every alert we send you.
This means you’ll get this timely information delivered directly to your inbox whenever a new recommendation is made.
This content will still be available on our website in our Write-Ups page, of course.
But we want to make sure you have the information you need as soon as possible so that you can act on our time-sensitive trades.
Next, we are going to cease publishing these Weekly Updates.
Again, the official recommendations will be delivered directly to your inbox and will also live on our Alerts Tracker page.
And because this information will always be available on our website, we will be concentrating our efforts there instead of on these Weekly Updates.
We think these changes will make your experience as a member of Insider Edge much more clear and concise.
And with that said, let’s move on to one final Weekly Update for Insider Edge…
Consumer Portfolio Services, Inc.
Consumer Portfolio Services, Inc. (CPSS) operates as an independent finance company. The firm provides indirect financing to Americans with past credit problems or limited credit histories.
Essentially, the company finances the vehicles for them, then charges the client an in-house interest rate based on their perceived risk.
Black Diamond Capital Management clearly likes the business as they have been aggressively buying shares throughout January.
After accumulating more than 10% of the company’s outstanding shares, Black Diamond met the SEC’s definition of an insider and now must report their trades.
Insider status also gives the company substantial clout with executives and the board, often allowing the investment managers access to private internal information.
The firm has made five purchases in the last four weeks and now owns 4.23 million shares of CPSS stock.
As you can see in the chart above, CPSS is showing incredible strength in an otherwise weak stock market.
Relative strength is near all-time highs – a sign of how well the stock is outperforming the rest of the market.
Per the Trade Tracker, CPSS remains a Buy with an end-of-day closing stop at $9.00.
Salient Midstream & MLP Fund
The next idea is Salient Midstream & MLP Fund (SMM) – a closed-end management investment company focused on the midstream energy space.
Headquartered in the oil capital of Houston, Texas, the firm invests in equity securities, subordinated units, general partner interests and preferred shares in an effort to provide the highest level of total return. It emphasizes making quarterly cash distributions to shareholders.
As of today, SMM has a 3.9% dividend yield, which in the current environment of pending rate hikes from the Fed makes this an even more attractive investment for institutional clients seeking yield.
One such institutional whale gobbling up shares of SMM is Saba Capital Management – a 10% owner who recently put its own people on Salient’s board of directors.
This is crucial for activist investors like Saba as it gives them a level of internal control and knowledge about the company they take a stake in.
Saba has made 15 buys in SMM stock over the last two months for a total investment of $6,748,520. Its last purchase was last Monday, and I wouldn’t be surprised if they continue buying.
SMM stock, in addition to also having a high level of relative strength, is completing a cup with handle formation on the chart.
A shakeout to the $6.20 area at the end of last week likely shook out the final wave of weak holders and will likely serve to strengthen this setup should shares breakout to new highs as expected.
I suggest building a long position in SMM before that happens.
Per the Trade Tracker, SMM remains a Buy with an end-of-day closing stop at $6.10.
EverQuote Inc.
We still have other positive company insider stocks to capitalize on this week, including our recent buy in EverQuote Inc. (EVER).
EverQuote is the Cambridge, Massachusetts-based tech company that provides an online marketplace for insurance shopping.
Consumers are able to shop for quotes from almost a dozen different carriers for auto, home and life insurance. EverQuote, instead of having to underwrite these policies, simply receives a commission for referring the business.
The company’s platform is driven by data science. It matches and connects people seeking to purchase insurance with relevant options from its broad network of providers.
The company went public in 2018. After a nice run in 2019 and 2020, the stock fell off last year. Shares are off their highs by 75% and beginning to consolidate.
One insider is taking advantage of the dip and aggressively buying in size. Director and 10% owner, David Blundin, has invested $6,334,910 in EverQuote stock since December. His most recent buy was on Jan. 10, and he’s showing no signs of slowing down.
The company has yet to reach profitability, but with newer companies like this, sales growth is a better metric to judge a firm’s results. Sales were up 27% last year and are expected to continue that trend into 2022.
Despite the stock’s decline over the past 12 months, as I mentioned earlier, EVER appears to now be consolidating for a possible move higher.
Even with the heavy buying from our insider, daily volume is below average for the last six weeks, which is a good sign that sellers may be exhausted and clearing the way for a move higher.
Per the Trade Tracker, EVER remains a Buy with an end-of-day closing stop at $13.50.
Evergy, Inc.
Evergy, Inc. (EVRG) is the Kansas City, Missouri-based power utility that has been increasing its green and renewable energy portfolio, particularly with wind turbines that capitalize on midwestern wind flows for more power.
Recently, several top insiders began buying large chunks of the stock in their personal accounts. Combined, they have invested more than $12 million in the stock.
And as we discussed in past updates, one of the company’s board members recently filed reports of four separate buys.
The CEO and CFO seem to buy in tandem. They are both buying shares for only the second time. Their first purchases came this past March when they bought the stock right off its low before a 30% advance higher.
Director John Wilder started buying a month later, and he has made four additional buys in recent weeks.
EVRG stock does not see routine insider buying, making the recent cluster buy even more significant. I suggest following the lead of those on the inside and taking a position in Evergy.
Per the Trade Tracker, EVRG remains a Buy with an end-of-day closing stop at $57.00.
Best wishes for your trading,
Ross Givens
Editor, Insider Edge
