Goosehead Insurance Sees $317K Insider Stock Purchase

C-suite executives tend to have a good understanding of how their companies are performing. If these insiders are buying stock, it’s often a sign that business performance is strong and that the outlook for the stock is attractive.

In this report, we are going to highlight a C-suite stock purchase at Goosehead Insurance (GSHD:US). Goosehead is an independent personal lines insurance agency that is aiming to reinvent the traditional approach to distributing personal lines products and services throughout the US. It is listed on the Nasdaq and currently has a market cap of around $2.3 billion.

Insider Buying

Our data shows that on August 2 and August 14, Goosehead’s President and COO Mark Miller purchased 5,000 shares at an average price of $63.55 per share. This trade cost the insider $317,750 and increased his holding to 15,000 shares.

Good Track Record

Mr. Miller – who has a private equity background – has made some well-timed purchases here in the recent past. For example, in late October and early November last year, he made several purchases when the stock was trading near $40. Since then, it has risen more than 50%. Given his trading track record, we think his latest purchase is notable.

Strong Growth

Goosehead’s recent Q2 results showed that the company has momentum at present.

For the quarter, total revenues were up 27% to $69.3 million. Adjusted earnings per share came in at $0.41, an increase 161% over the prior-year period.

At the end of the period, policies in force stood at 1,427,000, an increase of 21% year over year. However, corporate sales headcount was down 44% to 280.

“The restructuring of our corporate sales team is now complete and is producing extraordinary results,” commented Chairman and CEO Mark E. Jones. “We believe our actions should yield meaningful productivity gains over time,” he added.

Looking ahead, the company said that it expects organic growth of between 24% and 28% for the full year.

In light of this strong growth, we see the insider buying here as a bullish development.