We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 AGNC Investment Corp. (NASDAQ:AGNC), you may well want to know whether insiders have been buying or selling.
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 don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.
See our latest analysis for AGNC Investment
The Last 12 Months Of Insider Transactions At AGNC Investment
Over the last year, we can see that the biggest insider purchase was by CEO, Chief Investment Officer & Director Gary Kain for US$1.7m worth of shares, at about US$17.01 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$16.98). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Gary Kain was the only individual insider to buy over the year.
The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of AGNC Investment
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.5% of AGNC Investment shares, worth about US$43m. 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?
It doesn’t really mean much that no insider has traded AGNC Investment shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in AGNC Investment and we see no evidence to suggest they are worried about the 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 AGNC Investment may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.