Insiders may be rethinking their US$4.4m SoFi Technologies, Inc. (NASDAQ:SOFI) investment now that the company has lost US$492m in value – Simply Wall St
Stock Analysis
Insiders who acquired US$4.4m worth of SoFi Technologies, Inc.'s (NASDAQ:SOFI) stock at an average price of US$7.11 in the past 12 months may be dismayed by the recent 11% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$2.7m, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for SoFi Technologies
The Director Harvey Schwartz made the biggest insider purchase in the last 12 months. That single transaction was for US$513k worth of shares at a price of US$8.84 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$4.30). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
SoFi Technologies insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$7.11. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
SoFi Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that SoFi Technologies insiders own 10% of the company, worth about US$407m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
The fact that there have been no SoFi Technologies insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like SoFi Technologies insiders think the business has merit. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of SoFi Technologies.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
What are the risks and opportunities for SoFi Technologies?
NasdaqGS:SOFI
SoFi Technologies
SoFi Technologies, Inc. provides digital financial services.
Rewards
Earnings are forecast to grow 70.52% per year
Risks
Shareholders have been diluted in the past year
Has less than 1 year of cash runway
Share Price
Market Cap
1Y Return
Further research on
SoFi Technologies
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
SoFi Technologies, Inc. provides digital financial services.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
Read more about these checks in the individual report sections or in our analysis model.
High growth potential with mediocre balance sheet.
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