We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in ARMOUR Residential REIT, Inc. (NYSE:ARR).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At ARMOUR Residential REIT
Non-Executive Chairman Daniel Staton made the biggest insider purchase in the last 12 months. That single transaction was for US$251k worth of shares at a price of US$19.51 each. So it's clear an insider wanted to buy, at around the current price, which is US$19.85. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for ARMOUR Residential REIT share holders is that insiders were buying at near the current price.
Happily, we note that in the last year insiders paid US$313k for 15784 shares. But insiders sold 16863 shares worth US$343k. All up, insiders sold more shares in ARMOUR Residential REIT than they bought, over the last year. The chart below shows insider transactions (by 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 are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at ARMOUR Residential REIT Have Bought Stock Recently
There was some insider buying at ARMOUR Residential REIT over the last quarter. They bought US$281k worth in that time. On the other hand, Marc Bell sold US$251k worth of shares. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that ARMOUR Residential REIT insiders own 1.3% of the company, worth about US$15m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About ARMOUR Residential REIT Insiders?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. We're a little cautious about the insider selling at ARMOUR Residential REIT. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in ARMOUR Residential REIT, you should check out this free report on analyst forecasts for the company.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.