UWM (NYSE:UWMC) Trading Down 6.5% After Insider Selling

Key Points

• UWM shares fell 6.5% after insider selling, with the stock trading as low as $3.20 and well below recent averages in heavy but reduced volume.
• CEO Mat Ishbia sold more than 1 million shares twice in early May under a pre-arranged Rule 10b5-1 plan, cutting his ownership by 50% and drawing investor attention.
• Despite the stock drop, UWM recently beat earnings and revenue expectations and continues to offer a high dividend yield, while Wall Street’s consensus rating remains Hold with a $5.79 average price target.

UWM Holdings Corporation (NYSE:UWMC - Get Free Report)'s stock price fell 6.5% on Monday following insider selling activity. The company traded as low as $3.20 and last traded at $3.1610. 2,138,748 shares were traded during trading, a decline of 88% from the average session volume of 17,489,346 shares. The stock had previously closed at $3.38.

Specifically, CEO Ishbia Mat sold 1,003,333 shares of the stock in a transaction on Friday, May 8th. The stock was sold at an average price of $3.39, for a total value of $3,401,298.87. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Ishbia Mat sold 1,003,333 shares of the stock in a transaction on Wednesday, May 6th. The stock was sold at an average price of $3.66, for a total value of $3,672,198.78. Following the completion of the transaction, the chief executive officer owned 1,003,333 shares in the company, valued at approximately $3,672,198.78. This represents a 50.00% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Wall Street Analysts Forecast Growth

UWMC has been the topic of several recent analyst reports. Deutsche Bank Aktiengesellschaft restated a "hold" rating and set a $5.50 price objective on shares of UWM in a research note on Thursday. Argus upgraded UWM to a "hold" rating in a research note on Tuesday, March 31st. Barclays dropped their price objective on UWM from $6.00 to $5.00 and set an "overweight" rating on the stock in a research note on Monday, April 6th. Weiss Ratings cut UWM from a "hold (c-)" rating to a "sell (d+)" rating in a research note on Friday, March 27th. Finally, Jefferies Financial Group set a $4.40 price objective on UWM in a research note on Wednesday, February 25th. Three research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Hold" and an average price target of $5.79.

UWM Stock Down 6.7%

The company has a current ratio of 1.52, a quick ratio of 1.52 and a debt-to-equity ratio of 2.64. The firm has a market cap of $5.05 billion, a PE ratio of 11.69 and a beta of 1.78. The stock has a fifty day simple moving average of $3.77 and a two-hundred day simple moving average of $4.73.

UWM (NYSE:UWMC - Get Free Report) last issued its quarterly earnings data on Wednesday, May 6th. The company reported $0.09 EPS for the quarter, topping the consensus estimate of $0.06 by $0.03. UWM had a return on equity of 18.89% and a net margin of 1.92%.The company had revenue of $901.43 million during the quarter, compared to analyst estimates of $709.85 million. As a group, sell-side analysts expect that UWM Holdings Corporation will post 0.38 EPS for the current fiscal year.

UWM Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, July 9th. Investors of record on Thursday, June 18th will be given a $0.10 dividend. The ex-dividend date is Thursday, June 18th. This represents a $0.40 dividend on an annualized basis and a yield of 12.7%. UWM's payout ratio is presently 148.15%.

Institutional Trading of UWM

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. Brandes Investment Partners LP purchased a new stake in shares of UWM in the fourth quarter worth $45,867,000. Azora Capital LP lifted its holdings in UWM by 230.8% in the fourth quarter. Azora Capital LP now owns 11,296,053 shares of the company's stock valued at $49,477,000 after acquiring an additional 7,881,586 shares during the period. Integrated Investment Consultants LLC bought a new position in UWM in the third quarter valued at about $32,630,000. Renaissance Technologies LLC bought a new position in UWM in the fourth quarter valued at about $21,580,000. Finally, First Trust Advisors LP bought a new position in UWM in the fourth quarter valued at about $19,303,000. Institutional investors own 53.59% of the company's stock.

UWM Company Profile

United Wholesale Mortgage NYSE: UWMC is a leading mortgage lender in the United States specializing in the wholesale channel. The company partners with independent mortgage brokers, community banks and credit unions to offer a full suite of residential mortgage products. Through its network of third-party originators, United Wholesale Mortgage underwrites, funds and closes loans, allowing its partners to focus on customer acquisition and service.

The company’s product offerings include conventional fixed- and adjustable-rate mortgages, Federal Housing Administration (FHA) loans, Veterans Affairs (VA) loans, U.S.

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