Insider Buying

Offerpad Solutions insider invests $1.7 million in stock

Offerpad Solutions Inc
(OPAD:US)
12 months:
+82.85%
Activity:
Bullish
Pattern:
Purchase from board member
News:
Q2 results
Offerpad Solutions Inc
(OPAD:US)
12 months:
+82.85%
Activity:
Bullish
Pattern:
Purchase from board member
News:
Q2 results

Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.

In this report, we are going to highlight some interesting insider buying at Offerpad Solutions Inc (OPAD:US). Offerpad is an American company that offers an online platform for buying and selling residential real estate. The company, which was founded in 2015, operates in approximately 1,800 cities and towns across the US. It’s listed on the New York Stock Exchange and currently has a market cap of $419 million.

Insider buying at Offerpad Solutions

Our data shows that between August 9 and August 11, board member Roberto Sella purchased 1.0 million OPAD shares at an average price of $1.69 per share. This trading activity cost the insider roughly $1.7 million and increased his holding to 1.378 million shares.

Expert investor

Mr. Sella has significant investment experience. Currently, he is Managing Partner of LL Funds, an alternative asset manager and private equity fund. Before this, he served at Morgan Stanley where he co-led US Fixed Income Investments for Morgan Stanley Investment Management. Prior to working in investment management, he worked at the Board of Governors of the Federal Reserve System as an assistant economist. Given his background, he is likely to have a good understanding of Offerpad’s investment potential.

What stands out here is that Mr. Sella has increased the size of his holding substantially. This suggests that he is very bullish on the stock at current levels. Our Insider Model views the trading activity as very positive.

Position of strength

Offerpad’s recent Q2 results showed that the company continues to grow.

For the quarter, the group generated revenue of $1.1 billion, up from $379 million a year earlier. Gross profit was $93.0 million, up 83% year on year, while net income was $11.6 million, up 26% year on year.

During the period, the group acquired 3,792 homes, up 87% year on year, and sold 2,888 homes, up 129% year on year.

Looking ahead, management was confident that the company will be able to navigate any slowdown in the real estate market.

“We are entering this temporary transition period from a position of strength. As the market moves from a sellers’ to a buyers’ market, we expect to have greater access to inventory and new opportunities as one of the largest home buyers in the country,” said Brian Bair, Chairman and CEO.

“We remain confident in our ability to navigate the short-term challenges of this market shift and deliver on our long-term goals of disciplined growth and achieving sustainable profitability,” added Mr. Bair.

The company’s growth does not seem to be reflected in the share price or valuation, however. At present, Offerpad trades at just 11 times this year’s forecast earnings.

In light of the low valuation here, we see the insider buying as a bullish indicator.

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