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Insiders Are Buying SoFi Stock. Here’s Why.

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Shares of SoFi (NASDAQ:SOFI) are in the green today, up more than 8%. What’s more, shares of the financial services company are up over 10% in the past week, recovering from a 52-week low of $7.74 that occurred on March 14. With the stock near a yearly low, insiders of SoFi have clearly taken notice. During March, three insiders have purchased shares, including CEO Anthony Noto. Noto has been the most aggressive with his purchases and has bought shares of his company seven times this month. So, why exactly are insiders buying SOFI stock?

The Social Finance (SoFi) logo is seen on a smartphone and a pc screen

Source: rafapress / Shutterstock.com

SOFI Stock: Why Insiders Are Buying

Insiders may sell stocks for a variety of reasons, whether it be for personal expenses, tax expenses, or a loss of faith in the company. However, there is only one reason why insiders buy stock in their company: They believe it will go up.

With SoFi trading near a 52-week low, it seems that insiders believe that SOFI stock has room to grow. During March, Noto has purchased 133,344 shares of SoFi so far. His most recent and largest purchase this month occurred yesterday when the CEO purchased 34,000 shares at an average price of $8.91. After the purchase, Noto now owns approximately 3 million shares.

Other company insiders have been active as well this month. On March 14, director Micah Heavener purchased 5,000 shares at an average price of $7.99 per share. Furthermore, director Ahmed Ali H. A. Al-Hammadi purchased 10,000 shares at an average price of $8.40 on March 16.

Zooming out further, insiders have been buying SOFI stock en masse the past year. According to Nasdaq, SoFi insiders have purchased 405 million shares during the past year, while selling 180 million shares. In total, the purchases amount to a net activity of 224 million shares bought.

Based on insider purchases, it can be inferred that insiders are bullish on SoFi. With that in mind, let’s take a look at who else is betting big on the financial services company.

Who Else Is Betting Big on SoFi?

According to WhaleWisdom, institutional ownership of SoFi increased by 19% quarter-over-quarter during Q4. In addition, 427 funds now own SoFi, which was an increase of 127 funds from Q3. With that said, let’s take a look at the top five institutional owners of SoFi as of Q4.

  1. SoftBank Group: 117 million shares or 14.59% ownership.
  2. Vanguard Group: 53 million shares or 6.61% ownership.
  3. Red Crow Capital: 42 million shares or 5.28% ownership.
  4. T. Rowe Price: 35 million shares or 4.37% ownership.
  5. Silver Lake Group: 31 million shares or 3.86% ownership.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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