When top-level corporate executives are buying shares in their own companies, it can pay to take a closer look. Quite simply, these insiders are the smart money.
In this report, we are going to highlight some buying activity from a top-level insider at B. Riley Financial (RILY:US). B. Riley is an American financial services company which, through its subsidiaries, provides financial solutions to public and private companies and high net worth individuals. It is listed on the NASDAQ Global Market and currently has a market capitalization of $1.9 billion.
B. Riley Financial Inc: Insider Buying
Our insider transaction data shows that in June, B. Riley’s Co-Founder, Chairman, and Co-CEO Bryant Riley has purchased stock twice. On 4 June, the insider bought 20,000 shares at a price of $67.32 per share, spending $1.3 million on stock. Then, on 7 June, he added another 13,316 shares at a price of $66.31 per share, spending $882,975 on stock. In total, the insider spent just under $2.2 million on the stock.
Previous Trades Were Timed Well
This trading activity is worth highlighting due to the fact that Mr. Riley has made a number of very profitable trades over the last 12 months. In September last year, for example, he bought a large number of shares when the stock was trading under $30. More recently, in January, he spent several million dollars on shares when they were trading just under $50. Today, RILY stock is trading at $68, meaning that the insider has generated strong gains from his purchases. His recent purchases suggest that he expects the stock to continue rising.
B. Riley’s first-quarter results were very strong as a result of a high level of activity in the group’s investment banking division. For the quarter, operating revenue came in at $333.2 million versus $182.2 million in the same period last year, while total revenue came in at $600.2 million versus -$0.2 million in Q1 2020. Diluted income per common share was $8.81 for the period versus -$3.83 in the same period last year. On the back of these results, the group declared a regular dividend of $0.50 per share. It also declared a special dividend of $2.50 per share, which suggests that management is confident about the future.
During the quarter, B. Riley Financial completed the acquisition of wealth management group National Holdings, bringing nearly 700 registered representatives to the group, and enhancing its wealth management capabilities significantly. It also added a new risk and compliance practice that will enhance its advisory services.
In light of these developments, we see the insider buying here as a bullish signal.