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The Independent Director of Capstead Mortgage Corporation (NYSE:CMO), John Bernard, Just Bought 28% More Shares

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Investors who take an interest in Capstead Mortgage Corporation (NYSE:CMO) should definitely note that the Independent Director, John Bernard, recently paid US$4.87 per share to buy US$122k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 28%.

View our latest analysis for Capstead Mortgage

The Last 12 Months Of Insider Transactions At Capstead Mortgage

In fact, the recent purchase by John Bernard was the biggest purchase of Capstead Mortgage shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$4.82 (the recent price), 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. To us, it's very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Happily, we note that in the last year insiders paid US$254k for 45.80k shares. On the other hand they divested 850 shares, for US$7.0k. In total, Capstead Mortgage insiders bought more than they sold over the last year. They paid about US$5.54 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NYSE:CMO Recent Insider Trading May 7th 2020
NYSE:CMO Recent Insider Trading May 7th 2020

Capstead Mortgage 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.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 2.0% of Capstead Mortgage shares, worth about US$9.2m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Capstead Mortgage Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Capstead Mortgage stock. 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. When we did our research, we found 5 warning signs for Capstead Mortgage (1 is concerning!) that we believe deserve your full attention.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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. Thank you for reading.