Who Has Been Buying Velocity Financial, Inc. (NYSE:VEL) Shares?

NYSE:VEL).” data-reactid=”28″>It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Velocity Financial, Inc. (NYSE:VEL).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.” data-reactid=”31″>We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

Check out our latest analysis for Velocity Financial ” data-reactid=”36″> Check out our latest analysis for Velocity Financial

Velocity Financial Insider Transactions Over The Last Year

The Independent Director John Pitstick made the biggest insider purchase in the last 12 months. That single transaction was for US$77k worth of shares at a price of US$3.84 each. That implies that an insider found the current price of US$4.22 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we’re pleased to report that the insider purchases were made at close to current prices.

While Velocity Financial insiders bought shares during the last year, they didn’t sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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list of growing companies that insiders are buying.” data-reactid=”52″>There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Velocity Financial Insiders Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at Velocity Financial. In total, insiders bought US$123k worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership of Velocity Financial

Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data isn’t picking up on much insider ownership at Velocity Financial, though insiders do hold about US$795k worth of shares. This level of insider ownership is notably low, and not very encouraging.

What Might The Insider Transactions At Velocity Financial Tell Us?

2 warning signs we think you should be aware of.” data-reactid=”58″>The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Velocity Financial insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For example – Velocity Financial has 2 warning signs we think you should be aware of.