White Mountains Insurance Group, a major holder of
MediaAlpha (MAX) has acquired an additional 5,916,816 shares. The buy came to over $35 million, and is a 35 percent increase in the insurance company’s position in shares.
This marks the first insider buy this year. Some company insiders have been sellers of shares this year, mostly in February at a higher price than where the stock trades today.
Overall, company insiders own about 6.7 percent of shares, and institutions such as White Mountain own 92 percent of shares.
The insurance industry customer acquisition company is down over 10 percent in the past year.
MediaAlpha has been unprofitable in that time, and revenues have dropped nearly 22 percent, although shares are nearly double off their 52-week lows set back in May.
Action to take: Investors may want to look for a pullback before buying, given the strong rally in the past few months. A pullback will likely send shares to the low $8 range in the coming months.
It’s possible that a major owner like White Mountain makes an offer to buy up the entire company, which could lead to a one-time premium for investors in shares.
For traders, shares have flattened out after popping higher, and may trend lower in the coming months. The November $5 puts, last going for about $0.15, could likely see high double-digit gains on a steep drop in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.