Insiders who bought SoFi Technologies, Inc. (NASDAQ:SOFI) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$1.5b as a result of the stock's 27% gain over the same period. Put another way, the original US$11m acquisition is now worth US$18m.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
SoFi Technologies Insider Transactions Over The Last Year
The CEO & Director Anthony Noto made the biggest insider purchase in the last 12 months. That single transaction was for US$5.0m worth of shares at a price of US$4.58 each. Even though the purchase was made at a significantly lower price than the recent price (US$7.65), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid US$11m for 2.36m shares. But they sold 481.00k shares for US$3.2m. In the last twelve months there was more buying than selling by SoFi Technologies insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At SoFi Technologies Have Bought Stock Recently
At SoFi Technologies,over the last quarter, we have observed quite a lot more insider buying than insider selling. We can see that CEO & Director Anthony Noto paid US$2.4m for shares in the company. But we did see Chief Technology Officer Jeremy Rishel sell shares worth US$1.6m. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that SoFi Technologies insiders own 10% of the company, worth about US$744m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About SoFi Technologies Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about SoFi Technologies. That's what I like to see! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for SoFi Technologies you should be aware of.
But note: SoFi Technologies may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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