Market cap

As Porch Group, Inc.’s (NASDAQ:PRCH) market cap drops to $191 million, insiders may question their decision to buy earlier this year

The recent price drop of 22% in Porch Group, Inc. (NASDAQ:PRCH) The shares may have disappointed insiders who bought $2.1 million worth of shares at an average price of $4.92 over the past 12 months. Insiders invest in the hope that their money will increase in value over time. However, following recent losses, their initial investment is now only worth $812,000, which is not what they expected.

While we don’t believe shareholders should simply follow insider trades, logic dictates that you pay attention to whether insiders are buying or selling shares.

Porch Group Insider Trading Over the Past Year

Founder Matthew Ehrlichman made the biggest insider buy in the past 12 months. This single transaction involved $1.0 million worth of shares at a price of $7.59 each. This means that even when the stock price was above US$1.93 (the recent price), an insider wanted to buy stock. Although their perspective has changed since the purchase, it at least suggests that they have confidence in the future of the company. We always take careful note of the price paid by insiders when buying stocks. Generally, we are more positive about a stock if insiders bought the stock above current prices, as this suggests they viewed the stock as good value, even at a higher price.

While Porch Group insiders have bought shares over the past year, they haven’t sold. Their average price was around US$4.92. I would view this as a positive as it suggests insiders are seeing value around the current price. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, how much and when, just click on the chart below!

NasdaqCM: PRCH Insider Trading Volume as of August 1, 2022

Porch Group isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

Porch Group Insiders Recently Bought Stock

It’s good to see that Porch Group insiders have made notable investments in the company’s stock. In total, insiders purchased $1.1 million worth of stock during this period, and we had no sales. This suggests that the company has good points.

Insider ownership

Examining the total insider holdings in a company can help you know if they are well aligned with common shareholders. I think it’s a good sign if insiders have a significant number of shares in the company. Porch Group insiders own approximately $34 million in stock. This equals 18% of the business. We have certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.

What could insider trading at Porch Group tell us?

It is certainly positive to see the recent insider buying. We also rely on the longer-term picture of insider trading. However, we note that the company has not made a profit in the last twelve months, which makes us cautious. Insiders likely see value in Porch Group stock, given these transactions (as well as notable insider ownership of the company). In addition to knowing what insider trading is going on, it pays to identify the risks that Porch Group faces. Example: we have identified 3 warning signs for Porch Group you should be aware.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

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