Magnolia Capital Fund, a major owner of RE/MAX Holdings (RMAX), recently added 18,934 shares. The buy increased the fund’s holdings by just under 1 percent, and came to a total cost of just over $344,000.
This is the sixth buy that the fund has made since June. Otherwise, the last insider activity occurred in March 2021, when a company executive last sold shares. Activity was fairly quiet when shares were rising amid the latest real estate boom.
Company insiders own about 3.6 percent of shares. Investment funds like Magnolia account for the rest of outstanding shares.
The real estate brokerage firm is down about 42 percent in the past year as home sales have slowed considerably. While the company saw double-digit earnings and revenue growth in the past year, the firm didn’t break a profit.
Action to take: It’s likely too early to buy shares here, as the housing market slowdown likely still has some time to play out.
While the company pays a 5.1 percent dividend yield here, given the lack of profitability now and likely in upcoming quarters, a potential cut could occur. That could create a better entry point for interested investors.
For traders, the March 2023 $17.50 puts, last going for about $1.90, can likely deliver mid-to-high double-digit gains from here.
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.