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Westphal Christoph H and related entities: insider trades

Chief executive, Officer, Director, 10% owner at 3 companies we cover. 49 open-market purchases and 1 sale not made under a pre-set plan, reported from September 12, 2013 to October 18, 2018. Trades reported separately by several related funds or companies are counted once, under this name.

Would copying Westphal Christoph H and related entities’s purchases have beaten the S&P 500?

Buying each purchase the day after it was reported, an equal amount each, and holding it 12 months or until they reported a sale would have turned $10,000 on September 13, 2013 into $5,552 by November 2, 2026, −4.4% a year. The copy held shares only 32% of the time, so the fair comparison is the S&P 500 on those same days with Treasury bills otherwise: $21,223, +5.9% a year (the S&P 500 held throughout made $55,850, +14.0% a year). Beta against the index was 0.23. Twelve months after each report, the average purchase was −52.3% against the S&P 500 (median −73.0%), and 4% beat it: within what luck alone would produce (p = 0.98 over 4 years). Measured from the trade date, the insider’s own timing, the average was −53.0%.

With 296 insiders tested, some will look skilled or unskilled by chance alone: when we replaced each insider’s stocks with random companies bought on the same days, about 5.7 cleared the bar ahead and 23.3 behind. One record on its own proves little.

$0$20.0k$40.0k$60.0k 2013201520172019202120232025 $55.9k$21.2k$5.6k
Copying Westphal Christoph H and related entitiesS&P 500, same days investedS&P 500, held throughout $10,000 copying Westphal Christoph H and related entities’s open-market purchases from September 13, 2013, before costs and taxes, marked weekly. Each purchase gets the same starting stake, bought at the close of the first trading day after the report and sold 12 months later or the day after a reported sale of that stock; uninvested money earns the Treasury bill rate. “Same days invested” holds the S&P 500 only on the days the copy held shares, Treasury bills otherwise.
Return a year, copying
−4.4%
S&P 500, same days invested
+5.9% (held throughout +14.0%)
Time in shares
32%
Sharpe ratio (S&P 500)
0.01 (0.74)
Biggest drop (S&P 500)
−90% (−34%)
Market sensitivity (beta)
0.23
Purchases copied
49

Trade by trade

MeasuredTrades countedAverage vs S&P 500MedianWent the right wayYearst-statisticp-valueEvidence
Purchases, 3 months after the report 49 −11.3% −9.4% 20% 4 −1.64 0.20 No reliable evidence
Purchases, 6 months after the report 49 −27.4% −34.8% 18% 4 −1.14 0.34 No reliable evidence
Purchases, 12 months after the report 49 −52.3% −73.0% 4% 4 −0.02 0.98 No reliable evidence
Purchases, 12 months after the trade 49 −53.0% −68.3% 4% 4 −0.22 0.84 No reliable evidence
Sales, 3 months after the report 0 — — — — — — Not enough years
Sales, 12 months after the report 0 — — — — — — Not enough years
Sales, 12 months after the trade 0 — — — — — — Not enough years

“Average vs S&P 500” is the stock’s return including dividends minus the index’s over the same dates, from the close on the first trading day after the report, or from the close on the trade date. Only windows that have finished are counted. For sales, a negative figure means the stock lagged after it was sold, so selling was the right call (green). “Went the right way” is the share of purchases that beat the index, or of sales that trailed it. The t-statistic uses one average per year of reports, because one person’s trades bunch into the same stock and weeks, and needs trades in at least four different years; the p-value comes from the t distribution with that number of years (with four years, a t of 2 has p = 0.14). “Some evidence” means p under 5%, “strong evidence” p under 1% over at least six years.

Companies traded

CompanyTitle on the latest filingPurchasesSalesFirst reportLatest report
Decoy Therapeutics Inc. DCOY President and CEO441July 27, 2015October 18, 2018
Verastem, Inc. VSTM Executive Chairman30May 15, 2014January 28, 2015
Tempest Therapeutics, Inc. TPST —20September 12, 2013March 11, 2014

Trades and what followed

Moves are against the S&P 500; green means the trade went the insider’s way.

ReportedTradedCompanyTradeValue3 months after report12 months after report12 months after trade
October 18, 2018October 16, 2018 DCOY Sale $2,955,832 not yetnot yetnot yet
November 8, 2016November 8, 2016 DCOY Purchase $51,170 −37.8%−69.0%−73.0%
November 7, 2016November 7, 2016 DCOY Purchase $50,559 −38.1%−73.0%−68.3%
June 24, 2016June 23, 2016 DCOY Purchase $30,456 −0.2%−82.5%−77.2%
June 22, 2016June 21, 2016 DCOY Purchase $62,983 −1.9%−77.2%−78.8%
June 21, 2016June 17, 2016 DCOY Purchase $67,050 −1.0%−78.5%−86.1%
June 17, 2016June 15, 2016 DCOY Purchase $64,786 −3.3%−83.7%−88.4%
June 15, 2016June 13, 2016 DCOY Purchase $68,080 −3.1%−87.6%−89.2%
June 13, 2016June 9, 2016 DCOY Purchase $71,610 −1.2%−87.2%−88.0%
June 9, 2016June 7, 2016 DCOY Purchase $72,276 −7.1%−88.5%−90.0%
June 7, 2016June 3, 2016 DCOY Purchase $75,360 −12.5%−89.4%−91.3%
June 2, 2016June 1, 2016 DCOY Purchase $129,900 −15.0%−91.3%−90.7%
June 1, 2016May 27, 2016 DCOY Purchase $282,664 −19.2%−91.0%−90.6%
May 27, 2016May 25, 2016 DCOY Purchase $367,214 −16.5%−89.4%−91.3%
May 24, 2016May 23, 2016 DCOY Purchase $376,635 −10.2%−91.3%−91.7%
May 23, 2016May 19, 2016 DCOY Purchase $87,494 −9.5%−90.9%−89.4%
May 19, 2016May 17, 2016 DCOY Purchase $370,708 −14.9%−92.2%−85.7%
May 17, 2016May 13, 2016 DCOY Purchase $158,624 −6.8%−86.6%−85.5%
May 13, 2016May 11, 2016 DCOY Purchase $305,864 +6.1%−84.3%−84.2%
May 11, 2016May 9, 2016 DCOY Purchase $299,344 +8.4%−81.9%−83.6%
March 25, 2016March 23, 2016 DCOY Purchase $548,246 +5.7%−75.3%−81.8%
March 23, 2016March 21, 2016 DCOY Purchase $564,195 +3.5%−79.1%−81.9%
March 21, 2016March 17, 2016 DCOY Purchase $413,272 −8.1%−82.7%−79.6%
March 17, 2016March 15, 2016 DCOY Purchase $392,751 −1.7%−80.3%−76.7%
March 15, 2016March 11, 2016 DCOY Purchase $627,760 +0.2%−81.0%−64.4%
December 15, 2015December 14, 2015 DCOY Purchase $11,133 −9.4%−66.8%−67.4%
December 7, 2015December 7, 2015 DCOY Purchase $10,902 −42.5%−59.0%−56.5%
December 1, 2015November 30, 2015 DCOY Purchase $10,928 −38.4%−57.3%−56.6%
November 23, 2015November 23, 2015 DCOY Purchase $11,060 −30.4%−51.4%−50.0%
November 16, 2015November 16, 2015 DCOY Purchase $10,791 −28.7%−48.7%−49.4%
November 9, 2015November 9, 2015 DCOY Purchase $11,030 −21.7%−43.9%−45.0%
November 4, 2015November 2, 2015 DCOY Purchase $11,208 −24.4%−52.7%−58.0%
October 28, 2015October 26, 2015 DCOY Purchase $11,004 −22.4%−61.5%−57.0%
October 20, 2015October 19, 2015 DCOY Purchase $10,801 +2.2%−42.3%−46.0%
October 13, 2015October 12, 2015 DCOY Purchase $11,070 +5.0%−26.9%−8.2%
October 6, 2015October 5, 2015 DCOY Purchase $10,833 −8.4%−16.3%−19.1%
September 30, 2015September 28, 2015 DCOY Purchase $10,330 −7.3%−20.9%−2.1%
September 22, 2015September 21, 2015 DCOY Purchase $11,757 −16.1%−29.4%−27.2%
September 16, 2015September 14, 2015 DCOY Purchase $10,755 −27.8%−35.5%−30.6%
September 1, 2015August 31, 2015 DCOY Purchase $11,088 −3.0%−18.6%−20.4%
August 26, 2015August 24, 2015 DCOY Purchase $11,276 −4.3%−20.5%−27.3%
August 19, 2015August 17, 2015 DCOY Purchase $10,983 −21.2%−26.6%−28.3%
August 11, 2015August 10, 2015 DCOY Purchase $11,209 −23.8%−30.6%−29.5%
August 4, 2015August 3, 2015 DCOY Purchase $11,374 −24.7%−29.5%−36.3%
July 27, 2015July 27, 2015 DCOY Purchase $11,111 −29.8%−29.6%−33.3%
January 28, 2015January 28, 2015 VSTM Purchase $7,999,998 +4.0%−82.3%−79.8%
December 22, 2014December 19, 2014 VSTM Purchase $12,750 +26.6%−77.2%−77.9%
May 15, 2014May 14, 2014 VSTM Purchase $15,120 +12.6%−1.6%−6.7%
March 11, 2014March 7, 2014 TPST Purchase $1,000,000 −22.0%+351.8%+302.6%
September 12, 2013September 11, 2013 TPST Purchase $51,070 −14.8%+30.1%+20.3%

Open-market purchases and sales of at least $10,000 in companies we cover, from SEC Form 4 filings; sales made under a pre-set Rule 10b5-1 plan are not shown. “Not yet” means the window has not finished or the share price was under $5 at entry. These are the shares’ moves after each trade: they say nothing about why Westphal Christoph H and related entities traded and do not suggest the use of non-public information. How every insider compares · the insider trading backtest.