Capital One Financial Corporation (NYSE:COF) insiders sold US$3.1m worth of stock, possibly signalling a downtrend

By
Simply Wall St
Published
February 21, 2022
NYSE:COF
Source: Shutterstock

The fact that multiple Capital One Financial Corporation (NYSE:COF) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Capital One Financial

Capital One Financial Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President of Card, Michael Wassmer, sold US$2.8m worth of shares at a price of US$156 per share. That means that an insider was selling shares at around the current price of US$154. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Insiders in Capital One Financial didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:COF Insider Trading Volume February 21st 2022

I will like Capital One Financial better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Have Capital One Financial Insiders Traded Recently?

In the last quarter Independent Lead Director Ann Hackett sold US$143 worth of equity. That's not a lot. Ultimately the overall selling isn't enough to tell us much.

Does Capital One Financial Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Capital One Financial insiders own 1.0% of the company, currently worth about US$657m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Capital One Financial Insiders?

Our data shows a little more insider selling, but no insider buying, in the last three months. But given the selling was modest, we're not worried. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Capital One Financial insider transactions don't fill us with confidence. 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. To that end, you should learn about the 2 warning signs we've spotted with Capital One Financial (including 1 which is a bit concerning).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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