CEO Jay Farner Just Bought Rocket (RKT) Stock. Here’s Why.

Shares of Rocket Companies (NYSE:RKT) are up more than 5% during the past five trading days. The company hit a 52-week low of $10.07 on March 16 about a month after it reported Q4 earnings. For the quarter, Rocket reported earnings per shares (EPS) of 32 cents, which missed expectations by 5 cents. In addition, EPS was down from $1.14 a year ago. The homeownership services company also reported revenue of $2.44 billion, which missed revenue estimates by about $180 million. Despite the EPS and revenue misses, CEO Jay Farner is buying shares of RKT stock.

RKT stock Rocket Mortgage is open on a smartphone
Source: Lori Butcher / Shutterstock.com

CEO Jay Farner Buys RKT Stock

According to a Form 4 filed with the U.S. Securities and Exchange Commission (SEC), Jay Farner purchased 8,900 shares on March 30. The shares were purchased at an average price of $11.19, resulting in a total transaction amount of nearly $100,000. After the purchase, Farner directly owns 1.5 million shares of his company.

Furthermore, Farner indirectly owns an additional 204,000 shares for his children through his trust. Investors should note that the CEO’s shares were bought as part of a 10b5-1 trading plan, which allows insiders to sell stock on a prearranged schedule in order to comply with insider trading laws.

Why exactly is Farner purchasing shares after a rough quarter? As famed investor Peter Lynch once said, “Insiders might sell their shares for any number of reasons, but they buy them for only one: They think the price will rise.” Farner’s buy lends investors confidence of the potential success of Rocket.

With that in mind, let’s take a look at other Rocket insider activity. During the past 12 months, insiders have purchased 1.5 million shares while selling 745,130 shares. In total, insiders have amounted to a net activity of 793,57 shares bought during the past year.

Who Else Is Betting Big On Rocket Companies?

Tracking institutional ownership is important because these large funds provide liquidity and support for stocks. According to WhaleWisdom, which tracks all 13F filers, 249 funds own RKT stock as of Q4. This was an increase of 15 funds, or 6%, from the prior quarter. In addition, 57 funds initiated new positions during the quarter, while 4o funds completely liquidated their position. With that said, let’s take a look at the top five institutional shareholders of Rocket as of Q4:

  1. Rock Holdings: 1.84 billion shares
  2. Invesco (NYSE:IVZ): 10.29 million shares
  3. Caledonia Investments: 9.31 million shares
  4. Vanguard Group: 7.77 million shares
  5. BlackRock: 6.50 million shares

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/ceo-jay-farner-just-bought-rocket-rkt-stock-heres-why/.

©2022 InvestorPlace Media, LLC