Detroit-based Rocket Companies (NYSE:RKT) is among the most-important names in U.S. mortgage origination. Believe it or not, the company has originated more than $1.5 trillion worth of home loans. Just recently, it came to light the company’s CEO is holding a whole lot of RKT stock, and this might be your signal to start a long position.
The old market wisdom goes like this: Corporate insiders sell their shares for many reasons, such as to harvest year-end tax losses. However, they only buy their company’s stock because they believe it’s going to go up in value.
Besides, insiders might know something the rest of us don’t. For example, Rocket Companies is scheduled to release its first-quarter 2022 earnings results on May 10. Is it possible one insider at the company is buying shares in anticipation of expectation-beating results?
This question should be top-of-mind for investors, as Rocket Companies CEO Jay Farner recently upped the ante with a huge share purchase. Specifically, he acquired 22,800 RKT stock shares in a transaction dated April 27.
Apparently, Farner bought those shares at an average price of $8.75, bringing the total value to $199,500. Now, that might sound like small potatoes for a corporate CEO, but there’s more to the story.
With this purchase, Farner reportedly owns a jaw-dropping 1.88 million Rocket Companies shares, with a total value of $16.43 million.
We can’t read Farner’s mind, of course. Yet, it’s probably safe to surmise the CEO has absolute confidence in the future of his company. In case you’re curious, you’re invited to view the Securities and Exchange Commission (SEC) form for yourself and see the full breakdown of Farner’s purchases.
As you may recall, Rocket Companies knocked it out of the park in its most-recent fiscal report. “Rocket Mortgage had its best year ever in overall origination, with $351 billion in originations,” Farner observed. He also noted the company set a new record in home purchase volume in 2021.
Could another blockbuster earnings release be in the works? Only time will tell. However, the CEO’s series of share purchases should inspire confidence and motivate you to start building your own position in RKT stock.
On the date of publication, David Moadel did not have (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.
