Yahoo Finance The Founder & Executive Chairman of loanDepot, Inc. (NYSE:LDI), Anthony Hsieh, Just Bought 7.0% More Shares
Potential loanDepot, Inc. (NYSE:LDI) shareholders may wish to note that the Founder & Executive Chairman, Anthony Hsieh, recently bought US$356k worth of stock, paying US$1.60 for each share. Although the purchase only increased their holding by 7.0%, it is still a solid purchase in our view.
Check out our latest analysis for loanDepot
loanDepot Insider Transactions Over The Last Year
In fact, the recent purchase by Founder & Executive Chairman Anthony Hsieh was not their only acquisition of loanDepot shares this year. Earlier in the year, they paid US$6.93 per share in a US$8.7m purchase. That means that even when the share price was higher than US$1.63 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.
loanDepot insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$4.71. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
loanDepot is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does loanDepot Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. loanDepot insiders own about US$28m worth of shares. That equates to 5.5% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The loanDepot Insider Transactions Indicate?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in loanDepot shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing loanDepot. In terms of investment risks, we've identified 1 warning sign with loanDepot and understanding it should be part of your investment process.
Of course loanDepot may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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