Possible Bearish Signals With AGNC Investment Insiders Disposing Stock

In the last year, many AGNC Investment Corp. (NASDAQ:AGNC) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for AGNC Investment

AGNC Investment Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Gary Kain, for US$4.7m worth of shares, at about US$9.30 per share. That means that an insider was selling shares at slightly below the current price (US$9.76). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 18% of Gary Kain's holding.

Happily, we note that in the last year insiders paid US$148k for 15.77k shares. On the other hand they divested 551.10k shares, for US$5.1m. In total, AGNC Investment insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders At AGNC Investment Have Bought Stock Recently

We saw some AGNC Investment insider buying shares in the last three months. Independent Director Morris Davis bought US$50k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.8% of AGNC Investment shares, worth about US$50m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The AGNC Investment 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. We don't take much encouragement from the transactions by AGNC Investment insiders. But it's good to see that insiders own shares in the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 3 warning signs for AGNC Investment you should be aware of, and 2 of these are a bit unpleasant.

But note: AGNC Investment 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.