ARMOUR Residential REIT Non-Executive Chairman Acquires 71% More Stock

Investors who take an interest in ARMOUR Residential REIT, Inc. (NYSE:ARR) should definitely note that the Non-Executive Chairman, Daniel Staton, recently paid US$19.86 per share to buy US$199k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 71%, potentially signalling some real optimism.

See our latest analysis for ARMOUR Residential REIT

The Last 12 Months Of Insider Transactions At ARMOUR Residential REIT

Notably, that recent purchase by Non-Executive Chairman Daniel Staton was not the only time they traded ARMOUR Residential REIT shares this year. They previously made a sale of -US$1.2m worth of shares at a price of US$19.46 per share. That means that even when the share price was slightly below the current price of US$19.76, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 85% of Daniel Staton's stake.

In the last twelve months insiders purchased 11.00k shares for US$218k. But they sold 61.68k shares for US$1.2m. The chart below shows insider transactions (by companies and 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!

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Does ARMOUR Residential REIT Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From our data, it seems that ARMOUR Residential REIT insiders own 0.6% of the company, worth about US$5.5m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The ARMOUR Residential REIT Insider Transactions Indicate?

It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. Neither the level of insider ownership, nor the transactions over the last twelve months inspire us, but we think the recent buying is positive. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 3 warning signs we've spotted with ARMOUR Residential REIT (including 1 which is concerning).

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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 of direct interests only, but not derivative transactions or indirect interests.

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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.