Read This Before Selling ARMOUR Residential REIT, Inc. (NYSE:ARR) Shares

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell ARMOUR Residential REIT, Inc. (NYSE:ARR), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for ARMOUR Residential REIT

The Last 12 Months Of Insider Transactions At ARMOUR Residential REIT

Over the last year, we can see that the biggest insider purchase was by Co-CEO, Co-Vice Chairman Scott Ulm for US$139k worth of shares, at about US$13.88 per share. That means that an insider was happy to buy shares at above the current price of US$9.42. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 39.50k shares for US$428k. But insiders sold 750.00 shares worth US$12k. Overall, ARMOUR Residential REIT insiders were net buyers during the last year. The average buy price was around US$10.83. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

ARMOUR Residential REIT is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at ARMOUR Residential REIT Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at ARMOUR Residential REIT. insider Mark Gruber bought US$26k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership of ARMOUR Residential REIT

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.5% of ARMOUR Residential REIT shares, worth about US$9.2m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The ARMOUR Residential REIT Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think ARMOUR Residential REIT insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 6 warning signs we've spotted with ARMOUR Residential REIT (including 2 which are concerning).

But note: ARMOUR Residential REIT may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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