Insider Buying

Insider Buying Report: HireRight Holdings Corporation (HRT:US)

HireRight Holdings Corporation
(HRT:US)
12 months:
-13.10%
Activity:
Bullish
Pattern:
Purchase from Chairman
News:
Q1 results
HireRight Holdings Corporation
(HRT:US)
12 months:
-13.10%
Activity:
Bullish
Pattern:
Purchase from Chairman
News:
Q1 results

Following insider buying at smaller companies can be a very profitable trading strategy. Smaller businesses are less researched than larger companies, meaning that they offer greater potential for outperformance.

In this report, we are going to highlight insider buying at a small American company, HireRight Holdings Corp (HRT:US). HireRight is a leading provider of technology-focused workforce risk management and compliance solutions. The company, which has more than 40,000 customers globally, provides comprehensive background screening, verification, identification, monitoring, and drug and health screening services through a unified global software and data platform. It is listed on the New York Stock Exchange and currently has a market capitalization of $1.19 billion.

HireRight Holdings: Insider Buying

Our data shows that on June 3 and June 6, Chairman Mark Dzialga bought 27,572 shares at an average price of $15.2 per share. 

Furthermore, Between June 1 and June 13, Main Shareholder Stone Point Capital LLC also bought 734,996 shares at an average price of $14.77 per share.

In total, they both have spent just under $11.2 million on HireRight stock.

HireRight Holdings Corporation price chart showing notable buy and sell events

Investment Management Background

This trade is worth highlighting due to the fact that Mr. Dzialga – who has served on the board since 2018 – has considerable investment management experience. Currently, he is the Managing Partner of Brighton Park Capital and a member of the Investment Committee at the firm. Prior to founding Brighton Park Capital, he was a Managing Director at General Atlantic for more than 20 years. Before this, he was co-head of the High Technology Merger Group at Goldman Sachs, where he advised many of the firm’s technology clients on mergers, acquisitions, and restructurings. Given his background, it’s fair to assume that he has an excellent understanding of the intrinsic value here.

Additionally, Mr. Dzialga has upped his stake in the company by a significant percentage with this trade. By buying 27,572 shares, he has increased the size of his holding by 635%. The fact that the insider has increased his holding by such a large percentage suggests that he is confident the stock is set to move higher.

Full-Year Guidance Raised

HireRight recently posted an excellent set of Q1 results.

For the period, revenue amounted to $198.7 million, an increase of 33% year on year. Meanwhile, operating income was $20.0 million, up from $5.7 million a year earlier. Adjusted diluted earnings per share amounted to $0.37 per share, up from $0.12 per share a year earlier, and well ahead of the consensus forecast of $0.20.

On the back of these strong numbers, the group raised its full-year guidance. It now expects full-year adjusted earnings per share of $1.51 to $1.64, up from previous guidance of $1.32 to $1.45.

"Our first quarter results demonstrate the strength and resiliency of our global offering as well as the favorable secular trends in labor markets worldwide," said President and CEO Guy Abramo. "High demand, tight supply and an increasingly mobile or remote workforce provide favorable tailwinds for our industry and I am proud of the excellent work our team is doing to serve the leading companies around the world as they strive to achieve their workforce objectives. The increase to our 2022 financial outlook underscores the growing momentum of our business," he added.

In light of these results, and the increase to guidance, we see the insider buying here as a bullish indicator.

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