Good morning.

We have had a pretty busy February so far. A special situation I have invested in just doubled their dividend. A land bank reported earnings which we discussed in the Telegram group (update article coming out Wednesday). An industry I have been buying is starting to get massive operating leverage with key tailwinds that could last years. And also more dividends and buybacks.

Today we are going to look at a few large insider buying purchases.

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Insider Buying Monitor

Advanced Emissions Solutions (ADES): A messy and controversial value oriented stock that has gone through an unliked acquisition. Three directors recently bought $4.8 million, $2.5 million and $210k worth the of the company in the open market. The situation looks pretty messy but might be worth a look. A good primer for the company is an article on Seeking Alpha that highlights the recent acquisition.

First Citizens BancShares Inc. (FCNCA): With a market cap of $11 billion, First Citizens BancShares is a lot bigger of a company that I typically invest in. But the CEO recently purchased $736k worth of stock in the open market of the Class B shares. What attracts me to the company outside of the large insider buy is the share price of the bank being $780 per share. Some of the most undervalued companies have the highest share prices and typically have come across as strong capital allocators. I don’t know the name here but could be worth digging into.

Cardinal Ethanol LLC (CRDE): Probably the most illiquid stocks I have ever ran across. One director bought 42 shares for $630k and another one bought 32 shares for $494k. Outside of these transactions the stock doesn’t trade at all. In fact the ticker doesn’t even show up on Yahoo Finance. Weirdly enough the stock is classified as a “dark or defunct” company but they file everything with the SEC. Earnings per share in the most recent year was $5,868 and book value per share is north of $10,000. There is also net cash on the balance sheet. If you somehow figure out how to buy the stock let me know. I have found zero writeups on the company and have no idea how to buy the stock besides contacting the company directly. If you do buy the stock you will have to file a K-1 and you will probably never get out.

Hudson Global, Inc. (HSON): I’ve covered this name in a past article. The CEO continues to buy stock in the open market with another 2,000 shares acquired for $50k. The CEO is using a 10b5-1 trading plan which lets him buy stock anytime during the year despite any blackout period. I need to spend more time on the name. It looks undervalued with the CEO putting his money where his mouth is.

Juniata Valley Financial Corp. (JUVF): A director purchased $70K worth of shares in the open market for $15.48 per share on February 1st. The company is a small community bank in Pennsylvania with a market cap of $80 million. Juniata recently purchased a branch from Orrstown Financial (ORRF), who has also seen two insider buys (here and here) over the past week. The stock looks pretty cheap. there is a 5.50% dividend yield and it has a P/E ratio of 9.6x. The company also posted a record year. The stock is not owned by any institutions and management only owns 3.81% of the outstanding. It appears it could be a best known secret for community bank investors. Book value is 2.0x so further analysis should be done on if this name should trade above book value. Typically only high quality banks should trade above book value.

William Penn Bancorporation (WMPN): Meet William Penn Bancorporation. This is by far my favorite idea on the insider buying monitor this week and one I am considering digging into and taking a position in. A former mutual bank that went through a second-step conversion that is seeing large insider purchases, trading under book value, blowing through large share repurchases, owned by legendary community bank investors and coming up on a key catalyst in just three months. This name excites me and I plan to dig into the company this week. If you want to get caught up on the name check out these two articles I found (here and here). Have fun digging in.

That is all for this week. Feel free to reply to this email if you have any questions.

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