The largest insider transaction on today's Hot List is a Form 4 filing by Ernest Garcia II, CEO and co-founder of Carvana $CVNA.

CVNA just raised an additional $1 billion via a private offering of perpetual preferred stock, and Garcia has taken a large allocation.

He remains CVNA’s largest shareholder by a wide margin.

It’s been just over three weeks since Elon Musk filed his original 13G and revealed an investment in Twitter $TWTR.

Now, it looks like he’s about to take control of the entire company.

Yesterday, it was announced that Twitter has accepted his $44 billion offer to take over the company and go private.

Here’s what else is happening in the world of insider activity…

With the S&P500, Dow Jones Industrial Average, Nasdaq 100 and Global 100 Indexes down in recent weeks, the Dow Jones Transportation Average has been up each of the past 2 weeks.

And Transports started out this week positive once again:

From the desk of Steve Strazza @Sstrazza

The market has become increasingly volatile as selling pressure spreads to the strongest stocks.

As bullish opportunities become more scarce, we’ve had to become more selective in terms of our long exposure.

This is because we’re trend followers. We want to be involved in uptrends, and as more and more uptrends come under pressure, we have fewer options. It’s as simple as that.

But when it comes to corporate insiders and activists, they actually become more active when stocks are under pressure. They love buying weakness.

So while there are fewer opportunities for trend followers like us, there is a growing list of opportunities for bargain-hunters like them. 

As such, insiders have been very active in recent weeks as stocks continue to slide. But they don’t only buy downtrends. There has been some activity in names showing impressive relative strength as well.

Let’s talk about a handful of leading stocks that insiders have shown interest in recently.

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-up scans: Follow the Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.

Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.

What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.

This morning, the big market news is that Twitter $TWTR and Elon Musk are getting close to striking a deal for the eccentric billionaire to take the company private.

This is a dramatic turn of events from just last week, when the company announced it had adopted a “poison pill” to ward off Musk’s takeover efforts.

The latest reports suggest a deal could be finalized as early as today.

From the desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We’ve had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

We recently decided to expand our universe to include some mid-caps…

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

The way we did this is simple…

To make the cut for our new Minor Leaguers list, a company must have a market cap between $1 and $4B.

From the desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that which you can check out here.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

The largest insider buy on today's list is a Form 4 filing by Jan Barta of Pale Fire Capital.

Barta now owns 2,658,550 shares of Groupon $GRPN, which represents an ownership stake of approximately 9%.

This is our ASC Research Q2 2022 Playbook.

With the current market environment giving us many mixed messages, what better time to dive in and see what's happening underneath the surface?

• Stocks (International & U.S.)
• U.S. Sectors & Industries
• Market Breadth & Sentiment
• Commodities
• Currencies
• Intermarket Analysis
• Cryptocurrencies
• New Trade Ideas
• Overall Strategy

In the activist world, Bill Ackman announced that Pershing Square exited its position in Netflix $NFLX, as the stock was plunging lower by 35% on the heels of a disappointing earnings report.

It’s estimated that the hedge fund lost over $400 million on the position, which was just purchased back in January.

From the desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as a market of stocks.

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions… but there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club. We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports. Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.