A high-level insider has a deeper insight into their own company’s operations than any outside analyst or fund manager could ever hope to obtain. They are the smart money, which means that if they are buying stock, it is worth taking note of.
Here, we are going to highlight an insider purchase at Trupanion Inc (TRUP:US). Trupanion provides medical insurance for cats and dogs on a monthly subscription basis in the United States, Canada, Puerto Rico, and Australia. It’s traded on the NASDAQ Stock Exchange and currently has a market capitalization of $3.33 billion.
Trupanion Inc: Insider Buying
Form 4 filings show that on 4 May an Independent Director of Trupanion, Robin Ferracone, purchased 18,000 TRUP shares at a price of $79.60 per share. This purchase cost the insider approximately $1.4 million and increased his holding by around 50%.
This insider share purchase looks interesting for a couple of reasons. This is a sizable purchase in monetary terms. Our data shows that it is the largest insider purchase at Trupanion for several years.
Secondly, this trade has increased the size of the insider’s holding significantly. This means it is a high-conviction trade. It suggests that he firmly believes the shares are undervalued at current levels.
Trupanion’s first-quarter results at the end of April were very impressive. The company produced total revenue of $154.7 million which was up 39% compared to Q1 2020. Total enrolled pets were 943,854 at the end of March 2021, which represented a 37% increase on a year earlier. The subscription business also grew revenue by an impressive 27% year on year to $113.3 million. There was a net loss of $12.4 million as the business focused on growth over profitability and increased marketing spend as well as investing in technology and administration.
“2021 is off to a flying start, with revenues up 39% year-over-year, led by growth in subscription pets. We’re well-positioned in a large, underpenetrated market and have the capital to continue to grow at these accelerated rates,” said Darryl Rawlings, founder, and chief executive officer of Trupanion.
On the back of these impressive Q1 numbers and a confident outlook, we see the recent insider buying at Trupanion as bullish. It suggests that the Independent Director is very confident the high levels of growth will be sustained.