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 shareholders might well want to know whether insiders have been buying or selling shares in MFA Financial, Inc. (NYSE:MFA).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
MFA Financial Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director Robin Josephs bought US$99k worth of shares at a price of US$7.10 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.
Happily, we note that in the last year insiders bought 24.18k shares for a total of US$174k. In total, MFA Financial insiders bought more than they sold over the last year. They paid about US$7.18 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is US$6.89. You can see the insider transactions over the last year depicted in the chart below. 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 alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at MFA Financial Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at MFA Financial. Robin Josephs spent US$99k on stock, and there wasn’t any selling. That shows some optimism about the company’s future.
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. MFA Financial insiders own 0.6% of the company, currently worth about US$20m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At MFA Financial Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in MFA Financial shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in MFA Financial, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.