Insiders scooped up shares from this battered 2020 IPO

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Two board members of a battered mortgage-linked company bought shares in the company. Here’s what investors need to know.

What happened: Two members of the board of directors of Rocket companies RKT have actively purchased shares of the company over the past month, including several purchases in the past week.

CEO Jay Farner and member of the board of directors Matthew Rizik each made multiple purchases in the past week to buy additional shares of Rocket Companies stock. Here’s a look at last week’s trades.

Jay Farner:

  • 6/21 29,700 shares at an average of $6.73
  • 6/22 28,600 shares at $6.97 on average
  • 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 trades, Farner holds 2,852,307 Rocket shares. Farner also has a trust that owns 204,000 shares of Rocket Companies.

Matthew Rizik:

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

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

Related Link: Rocket Q1 Earnings Highlights: Falling Revenues and EPS, Mortgage Refinances and Cashing Out See the Force

Why it matters: Insider buying by corporate 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 that they believe the stock is undervalued at current levels.

In both cases, the trades were part of Rule 10b5-1 trading plans which are programmed in advance and allow insiders to buy or sell shares based on the achievement of certain prices or planned periods. The plan allows directors to avoid the risk of insider trading.

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

For more insider trading, see Benzinga’s insider trading page.

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

Photo: Courtesy of Michigan Municipal League on Flickr

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