Are Insiders Buying Capitol Federal Financial, Inc. (NASDAQ:CFFN) Stock?
It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Capitol Federal Financial, Inc. (NASDAQ:CFFN).
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, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. 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'.
View our latest analysis for Capitol Federal Financial
Capitol Federal Financial Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Michel' Cole for US$70k worth of shares, at about US$9.95 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$13.21. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Happily, we note that in the last year insiders paid US$178k for 17.65k shares. But they sold 2.28k shares for US$26k. Overall, Capitol Federal Financial insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) 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!
Capitol Federal Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Capitol Federal Financial Have Sold Stock Recently
The last three months saw some Capitol Federal Financial insider selling. Executive VP & Chief Commercial Lending Officer Robert Kobbeman divested only US$26k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Does Capitol Federal Financial Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 1.9% of Capitol Federal Financial shares, worth about US$34m. 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 Do The Capitol Federal Financial Insider Transactions Indicate?
While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Capitol Federal Financial and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Capitol Federal Financial has 1 warning sign we think you should be aware of.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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