It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in AGNC Investment Corp. (NASDAQ:AGNC).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
AGNC Investment Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO, Chief Investment Officer & Director Gary Kain bought US$1.7m worth of shares at a price of US$17.01 per share. That means that an insider was happy to buy shares at around the current price of US$17.51. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. The good news for AGNC Investment share holders is that insiders were buying at near the current price.
Happily, we note that in the last year insiders paid US$1.8m for 107k shares. But insiders sold 18334 shares worth US$337k. In total, AGNC Investment insiders bought more than they sold over the last year. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
AGNC Investment Insiders Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at AGNC Investment. Gary Kain spent US$1.7m on stock. On the other hand, Morris Davis netted US$207k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of AGNC Investment
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that AGNC Investment insiders own 0.5% of the company, worth about US$45m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The AGNC Investment Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Given that insiders also own a fair bit of AGNC Investment we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in AGNC Investment, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.