Top-level corporate insiders tend to have an information advantage over other investors because they have the most up-to-date data on their businesses. If these insiders are buying company stock, it’s generally a bullish development.
In this report, we are going to highlight some interesting insider buying at HCI Group Inc (HCI:US). HCI is an American company that owns subsidiaries engaged in diverse and complementary business verticals, including homeowners’ insurance, information technology, real estate, and reinsurance. Its goal is to maintain consistent profitability and best-in-class margins, and generate long-term shareholder value. The company is listed on the New York Stock Exchange and currently has a market capitalization of $654.3 million.
HCI Group Inc: Insider Buying
Our insider transaction data shows that on April 5, two top-level insiders at HCI bought stock. Those who picked up shares were:
- Founder, Chairman and CEO Paresh Patel (1,500 shares @ $69.20 per share)
- Founder and Lead Independent Director Gregory Politis (2,000 shares @ 68.38 per share)
Together, the two insiders spent around $240,000 on HCI stock.
These two insiders are likely to have an excellent understanding of HCI’s prospects.
Mr. Patel leveraged his extensive software development experience to design HCI’s policy administration systems, which he continues to oversee today. Meanwhile, Mr. Politis has more than 45 years of experience in the real estate industry, where he has developed and retained ownership of retail, office, and industrial spaces. Before founding HCI Group, the two individuals co-founded NorthStar Bank in Tampa, Florida.
It’s worth noting that these trades represent the first purchases from these two insiders since early 2019. This suggests that they see value in the stock at present.
HCI Group’s share price has taken quite a hit since November. However, the group continues to make progress.
Recent results, for example, showed that in the fourth quarter of 2021, consolidated gross written premiums hit $189.3 million, up 36% year on year. Meanwhile, consolidated gross premiums earned totaled $156.8 million, an increase of 44% from the fourth quarter of 2020. Net investment income increased to $2.6 million in the fourth quarter, from $1.3 million a year earlier.
“In 2021 we grew our premiums by a third and we reported a profit for the year,” commented Mr. Patel. “Further, we deleveraged our balance sheet and grew book value by 24%".
Looking ahead, management was confident that the company can continue to grow. “We enter 2022 poised for another year of profitable growth,” said Mr. Patel.
In light of the growth here, we see the insider buying as a bullish indicator.