It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Invesco Mortgage Capital Inc. (NYSE:IVR), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
Invesco Mortgage Capital Insider Transactions Over The Last Year
The Independent Non-Executive Director, Dennis Lockhart, made the biggest insider sale in the last 12 months. That single transaction was for US$225k worth of shares at a price of US$3.30 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$3.89. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. It is worth noting that this sale was 70% of Dennis Lockhart's holding.
Insiders in Invesco Mortgage Capital didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 Invesco Mortgage Capital Have Sold Stock Recently
We have seen a bit of insider selling at Invesco Mortgage Capital, over the last three months. Independent Non-Executive Director James Lientz divested only US$37k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn't enough for us to put any weight on it.
Insider Ownership of Invesco Mortgage Capital
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. We usually like to see fairly high levels of insider ownership. Our data suggests Invesco Mortgage Capital insiders own 0.2% of the company, worth about US$1.7m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Invesco Mortgage Capital Tell Us?
We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. We're a little cautious about the insider selling at Invesco Mortgage Capital. And usually insiders own more stock in the company, according to our data. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Invesco Mortgage Capital. Case in point: We've spotted 3 warning signs for Invesco Mortgage Capital you should be aware of, and 2 of these make us uncomfortable.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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