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Insiders Are Buying RE/MAX Holdings
Posted by: Markus Aarnio (IP Logged)
Date: October 6, 2013 02:39PM

One real estate broker has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

The stock is purchased by three or more insiders within one month.

The stock is sold by no insiders in the month of intensive purchasing.

At least two purchasers increase their holdings by more than 10%.

RE/MAX Holdings (RMAX) operates as a real estate broker. RE/MAX's business strategy is to recruit and retain agents and sell franchises. RE/MAX has held the number one market share in the U.S. and Canada since 1999 as measured by total residential transaction sides completed by its agents.



Insider Buying During the Last 30 Days
  • Kathleen Cunningham purchased 7,500 shares on Oct. 1 pursuant to the initial public offering. Kathleen Cunningham currently holds 9,773 shares or less than 0.1% of the company. Kathleen Cunningham serves as a director of the company. Kathleen Cunningham increased her holdings by 330% in October.
  • Daryl Jesperson purchased 5,000 shares on Oct. 1 pursuant to the initial public offering. Daryl Jesperson currently holds 7,273 shares or less than 0.1% of the company. Daryl Jesperson serves as a director of the company. Daryl Jesperson increased his holdings by 220% in October.
  • Roger Dow purchased 5,000 shares on Oct. 1 pursuant to the initial public offering. Roger Dow currently holds 7,273 shares or less than 0.1% of the company. Roger Dow serves as a director of the company. Roger Dow increased his holdings by 220% in October.
  • Vincent Tracey purchased 10,000 shares on Oct. 1 pursuant to the initial public offering. Vincent Tracey currently holds 25,910 shares or less than 0.1% of the company. Vincent Tracey is president and director. Vincent Tracey increased his holdings by 62.9% in October.
  • Geoffrey Lewis purchased 7,000 shares on Oct. 1 pursuant to the initial public offering. Geoffrey Lewis currently holds 36,547 shares or 0.1% of the company. Geoffrey Lewis is executive vice president, chief legal and compliance officer. Geoffrey Lewis increased his holdings by 23.7% in October.
  • Michael Ryan purchased 3,450 shares on Oct. 1 pursuant to the initial public offering. Michael Ryan currently holds 12,542 shares or less than 0.1% of the company. Michael Ryan is executive vice president, global communications and branding. Michael Ryan increased his holdings by 37.9% in October.
  • Ronald Harrison purchased 6,000 shares on Oct. 1 pursuant to the initial public offering. Ronald Harrison currently holds 8,273 shares or less than 0.1% of the company. Ronald Harrison serves as a director of the company. Ronald Harrison increased his holdings by 264% in October.
  • Richard Covey purchased 5,000 shares on Oct. 1 pursuant to the initial public offering. Richard Covey currently holds 7,273 shares or less than 0.1% of the company. Richard Covey serves as a director of the company. Richard Covey increased his holdings by 220% in October.
  • Daniel Predovich purchased 2,500 shares on Oct. 1 pursuant to the initial public offering. Daniel Predovich currently holds 4,773 shares or less than 0.1% of the company. Daniel Predovich serves as a director of the company. Daniel Predovich increased his holdings by 110% in October.
Insider Buying by Calendar Month

Here is a table of RE/MAX Holdings' insider-trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
October 201351,4500

There have been 51,450 shares purchased and there have been zero shares sold by insiders since October 2013. RE/MAX had its IPO on October 1.

Financials


RE/MAX reported the pro forma first six months results with the following highlights:

Revenue$82.3 million
Net income$3.7 million
Cash$69.6 million
Debt$223.2 million
Tangible book value-$4.46 per share

Outlook

National Association of Realtors is forecasting that:
  1. In 2013, existing home sales will increase by 8.3% to 5.0 million units and median existing home sale prices will increase by 10.6%, each as compared to 2012.
  2. In 2014, existing home sales will increase by 2.5% to 5.2 million units and median existing home sale prices will increase by 5.7%, each as compared to 2013.


RE/MAX believes that it is well-positioned to benefit from an increase in its agent count as a result of the current U.S. economic recovery and the rebound in the U.S. housing sector which appears to be gaining momentum.

Competition

RE/MAX' largest national competitors in the U.S. include Realogy Holdings (RLGY) (which operates several brands including Century 21 and Coldwell Banker), Berkshire Hathaway Home Services (BRK.A) (which acquired Prudential Real Estate and Relocation Services in 2012) and Keller Williams Realty.



Realogy Holdings has seen 65,478,372 shares sold and zero shares purchased by insiders this year.

Conclusion

There have been nine different insiders buying RE/MAX and there have not been any insiders selling RE/MAX during the past 30 days. All nine of these insiders increased their holdings by more than 10%.

RE/MAX started trading on October 2 after the initial public offering. The insiders paid $22 for their shares and the stock is currently trading at $31.65. I believe the stock could be a good pick at $22 based on the intensive insider buying.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.


Stocks Discussed: RMAX, RLGY, BRK.A,
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