It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Capitol Federal Financial, Inc. (NASDAQ:CFFN).
What Is Insider Selling?
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.
Capitol Federal Financial Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive VP Natalie Haag bought US$60k worth of shares at a price of US$12.29 per share. That implies that an insider found the current price of US$13.47 per share to be enticing. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Capitol Federal Financial share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 10156 shares worth US$130k. In the last twelve months Capitol Federal Financial insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Capitol Federal Financial is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Capitol Federal Financial Have Bought Stock Recently
There was some insider buying at Capitol Federal Financial over the last quarter. Natalie Haag purchased US$26k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.8% of Capitol Federal Financial shares, worth about US$34m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Capitol Federal Financial Insider Transactions Indicate?
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. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Capitol Federal Financial and their transactions don't cause us concern. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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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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.