Insiders Have Been Scooping Up Shares Of This Beaten Down 2020 IPO

Two members of the Board of Directors of a beaten down mortgage related company have been buying shares of the company. Here’s what investors should know.

What Happened: Two Board of Directors members of Rocket Companies RKT have been actively buying shares of the company over the last month, including several purchases last week.

CEO Jay Farner and Board of Directors member Matthew Rizik each placed several purchases last week to buy additional shares of Rocket Companies stock. Here's a look at the transactions from last week. 

Jay Farner:

• 6/21 29,700 shares at an average of $6.73
• 6/22 28,600 shares at an average of $6.97
• 6/23 27,900 shares at an average of $7.15
• 6/24 26,000 shares at an average of $7.69

After the latest transactions, Farner owns 2,852,307 shares of Rocket stock. Farner also has a trust that owns 204,000 shares of Rocket Companies stock.

Matthew Rizik:

• 6/21 3,200 shares at an average of $6.73
• 6/22 3,100 shares at an average of $6.97
• 6/23 3,000 shares at an average of $7.16
• 6/24 2,800 shares at an average of $7.70

Rizik now owns 220,702 shares of Rocket stock after the latest filings.

Related Link: Rocket Q1 Earnings Highlights: Revenue And EPS Fall, Refinances And Cash Out Mortgages See Strength 

Why It’s Important: Insider buying by company executives is often seen as a bullish sign for investors. If executives are willing to invest their own money in the company, it often shows they think shares are undervalued at current levels.

In both cases, the transactions were part of Rule 10b5-1 trading plans that are scheduled in advance and allow insiders the option to buy or sell shares based on hitting certain prices or certain planned time periods. The plan allows the directors to avoid concerns of insider trading.

Farner’s 10b5-1 plan was adopted on Feb. 28, 2002 and Rizik’s 10b5-1 plan was adopted on May 11, 2022.

For more insider transactions, check out Benzinga’s insider trades page.

Price Action: Rocket Companies shares closed Friday at $7.74 versus a 52-week range of $6.26 to $20.84.

Photo: Courtesy of Michigan Municipal League on Flickr