Jay Farner, CEO at Rocket Companies (RKT), recently added 45,900 shares. The buy increased his holdings by nearly 2 percent, and came to a total purchase price of around $400,000.
This follows up on other buys from the company CEO since the start of the year. Each buy is usually in the $400,000 to $600,000 area. The last insider sale at the company occurred in March 2021.
Overall, insiders at the company own about 1.7 percent of shares.
The mortgage company provider has seen shares drop 57 precent in the past year, as mortgage refinancings have been slowing amid rising interest rates. Earnings are down 56 percent, and revenue has already slid 41 percent.
Action to take: Investors should avoid shares for now. While the company has built itself up as a strong brand in the space, the potential for more interest rate hikes in the coming months could further weigh on the stock price. Investors can likely wait until the stock trades closer to its book value before buying.
For traders, the September $6.99 puts, last going for about $0.55, offer the potential for a double or better on a further decline in shares as interest rates continue higher in the coming months. Traders may want to exit the trade if there’s a hint that the rate of interest rate hikes will come to an end.
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.