Investor Presentation. Website: Phone:

Transcription

1 Investor Presentation Website: Phone:

2 Executive Summary Overview: The Tarsier Insider Buying Strategy is a large cap, long only, equity strategy that invests in companies whose top executives are buying their own company s stock on the open market. High Return Potential: Researchers at University of Pennsylvania, Harvard, University of Michigan, and University of Chicago have performed in-depth research that concludes that insider buying by the top executives at publicly traded companies empirically outperforms the market indices. Distinctive Strategy: We believe that only one other similar strategies exists. Transparency: We offer real-time account access Clarification of Insider Buying: Legal insider buying occurs when corporate insiders buy and sell stock in their own companies according to SEC regulations. Illegal insider buying occurs when a security is purchased, in breach of fiduciary duty, while in possession of material, nonpublic information about the security. 2

3 Top Executives Know Their Company The Best Average Annual Return of Firms with Insider Buying Grouped by Insider Identity ( ) 14.00%$ 11.56%& 12.00%$ 10.95%& 10.00%$ 9.32%& 8.00%$ 7.38%& 6.00%$ 4.00%$ 2.00%$ 0.00%$ All$Firms$with$ Insider$Buying$ Firms$with$Officer$ Buying$ Firms$with$Top$ ExecuDve$Buying$ Firms$with$Top$ ExecuDve$Cluster$ Buying$ It is a strong signal to the market when top executives buy their own company s stock. Source: Catalyst Mutual Funds 3

4 Large Purchases Are The Most Meaningful Average Annual Return of Firms with Top Executive Buying Grouped by Number of Shares Purchased ( ) 30.00%$ 25.00%$ 20.00%$ 25.99%% 26.41%% 15.00%$ 12.01%% 10.00%$ 5.00%$ 3.88%% 0.00%$ 1$)$1,000$Shares$ 1,001$)$10,000$ Shares$ 10,001$)$50,000$ Shares$ 50,000+$Shares$ By using a selective approach, Tarsier Capital seeks to capitalize on the most significant instances of insider buying. Source: Catalyst Mutual Funds 4

5 Investment Strategy: Insider traders must file Form 4 within 2 days For illustrative purposes only. 5

6 Insider Investment Philosophy Use legal information from SEC filings to create an insider portfolio Key criteria to understand and filter choices Number of Insiders Buying Seniority of Insiders Size of Transactions Buying / Selling History Is there cluster buying? Are there conflicting signals? What positions do the insiders hold in their company? (CEO, CFO, VP, or Directors?) Are insiders buying / selling a significant stake? What has the history of insider transactions been at the company? Filter and invest in positions with the strongest signals 6

7 Insider Buying Strategy Investment Process Proprietary Quantitative Screen Track and rank corporate insider activity based on Form 4 filings Focus on: open market purchases, insider identity (position in company), transaction size, number of insiders buying, historical track record, etc. Qualitative Review Analyze results of quantitative screen for potential inclusion in portfolio Take into consideration: potential motivations, company and/or industry trends, conflicting buy/sell signals, etc. Active Monitoring Monitor portfolio holdings for changes in insider activity Sell positions at any time if significant insider selling occurs If a position has no continued buying, seek to replace after 1 year with new holding Seek to stay focused on the best opportunities Portfolio Construction Seek to hold 12 to 18 companies meeting quantitative screen & qualitative review criteria Focus on companies with a market capitalization over $10 billion Consider both value and growth companies Limit industry concentration to 25% 7

8 Key Reasons to Invest The Tarsier Insider Buying Strategy offers investors an opportunity to invest in large cap U.S. companies that are experiencing significant insider buying. Insider-Driven Disciplined Strategy Potential Core Allocation The Fund only invests in companies where corporate insiders (CEO, CFO, directors, etc.) are purchasing their own company s stock on the open market. We believe corporate insiders understand their own firm better than any outsider possibly could. We use a proprietary, quantitative model to rank stocks based on insider activity. A qualitative review is performed on all stocks that meet our quantitative criteria. We implement an alphadriven investment approach, investing in companies that insiders believe will outperfom, we focus on the largest, most well-regarded U.S. companies, and those with the most significant insider buying signals. 8

9 Insider Buying Example: Keurig Green Mountain (Ticker: GMCR) Insider Signals 1. In the Fall of 2013, multiple insiders purchase over $1.5 million worth of GMCR stock 2. Some of these insiders made very well-timed transactions in the past Buying & Selling 1. Buy stock around $65-70/share after insider buying signal 2. Partnership with Coca-Cola announced after market close on February 5th 3. Sell after announcement ($120) Chart Corporate insiders at GMCR buy stock months before deal with Coca-Cola is announced. GMCR insiders have strong track record timing stock. For chart above, ^GSPC refers to S&P 500 Index. For illustrative purposes only. 9

10 Insider Buying Example: Freeport-McMoRan (Ticker: FCX) Insider Signals 1. In July 2013, Vice Chairman Flores purchases $14.8M and Chairman of the Board Moffett purchases $28.5M 2. In August 2013, Director Ford purchases $29.2M and Director Lackey purchases $54K Buying & Selling 1. Buy stock around $29/share after cluster buying signal 2. By 10/4/13, share price is around $34/share 3. S&P 500 Index was flat over same time period Chart Significant insider buying after market oversells FCX on commodities/china concerns gold slipped from $1650 to below $1250 For chart above, ^GSPC refers to S&P 500 Index. For illustrative purposes only. 10

11 University of Michigan Insider Buying Study U of M Study Finds 3.7% Market Outperformance 11

12 Conclusion Insiders possess better information about their own business than external shareholders Insiders buy for only one reason, they believe the stock will increase in value Academic findings conclude that the insider buying strategy outperforms the market Back test findings confirm the academic studies Returns from an insider buying strategy are maximized by considering various aspects of insider buying (e.g., trade volume, insider identity, etc.) 12

13 Getting Started What Types Of Accounts Are Accepted? Individual / Joint / IRA (Roth/ Traditional / Rollover / Inherited / SEP) / Trust / Partnership / Corporation / LLC How do I learn more? Contact Tarsier for a complimentary one-on-one consultation. How do I start an account? After a consultation, Tarsier will send you a link to start a managed account with Interactive Brokers. What is the difference between a managed account and a fund? Each of Tarsier s clients opens a separate brokerage account, which Tarsier manages alongside its other client accounts. Clients delegate trading permissions to Tarsier, but otherwise retain full control over the account. Assets within the account are held in the client s name. Mutual funds, hedge funds, and other similar vehicles are pools of capital from multiple investors combined into a single account. Investors own fractional interests in the pooled assets, but do not own or control the underlying account. 13

14 The Tarsier Advisor Platform Tarsier uses Interactive Brokers Professional Advisors Platform Each client owns their own account, Tarsier controls trading Clients have real-time, web-based account transparency Interactive Brokers is rated A-/A-2 by Standard & Poor s Low client execution fees ($0.005/share or less) Barron s ranked Interactive Brokers the best online brokerage 14

15 Account Guidelines Management Fee % Advisor Platform Interactive Brokers Account Execution/Trading Fees Initial Lockup Investor Liquidity Minimum $10 per month Varies by size and activity We ask that clients do not redeem capital for six months < 30 days Investor Reporting Real-time account transparency, Quarterly investor letters, Open-door policy with clients 15

16 Contact Information Tarsier capital Management, LLC Website: Blog: Principal: Fred Rockwell Phone: (202)

17 Management Fred Rockwell has over 10 years of investment management and financial services experience. Before founding Tarsier Capital Management he was a senior analyst at Catalyst Mutual Funds. He earned his MBA from the University of Michigan and he is a Chartered Financial Analyst (CFA), Certified Public Accountant (CPA), Professional Risk Manager (PRM), and a member of MENSA. David Miller co-founded Catalyst Mutual Funds in New York, where he serves as portfolio manager of the Insider Buying Fund (INSAX). At Tarsier Capital Management he provides guidance for the Focused Insider Buying Strategy. David earned his MBA from the University of Michigan. Industry Affiliations 17

18 Disclosures The information and data presented herein has been prepared on the basis of publicly available information, internally developed data or other third party sources. The information contained herein is not and shall not constitute an offer to sell or a solicitation to buy any products and shall not be considered investment advice. Investment advice can be provided by Tarsier Capital Management, LLC by a written agreement only. Information contained in this report is for informational purposes only. Tarsier Capital Management is a registered investment adviser with the State of Virginia. 18