Bullish insiders bet US$8.6m on loanDepot, Inc. (NYSE:LDI)
Over the last year, a good number of insiders have significantly increased their holdings in loanDepot, Inc. (NYSE:LDI). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for loanDepot
loanDepot Insider Transactions Over The Last Year
The Founder & Executive Chairman Anthony Hsieh made the biggest insider purchase in the last 12 months. That single transaction was for US$5.8m worth of shares at a price of US$3.76 each. That means that an insider was happy to buy shares at above the current price of US$2.78. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 3.02m shares worth US$8.6m. But insiders sold 200.00k shares worth US$316k. Overall, loanDepot insiders were net buyers during the last year. The average buy price was around US$2.84. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
loanDepot is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that loanDepot insiders own 5.4% of the company, worth about US$47m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The loanDepot Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think loanDepot insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing loanDepot. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of loanDepot.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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