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Have Insiders Been Buying Invesco Mortgage Capital Inc. (NYSE:IVR) Shares This Year?

Simply Wall St
·4 mins read

We often see insiders buying up shares in companies that perform well over the long term. 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 Invesco Mortgage Capital Inc. (NYSE:IVR).

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 in the company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.

Check out our latest analysis for Invesco Mortgage Capital

The Last 12 Months Of Insider Transactions At Invesco Mortgage Capital

The Non-Executive Director, John Day, made the biggest insider sale in the last 12 months. That single transaction was for US$195k worth of shares at a price of US$16.01 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$17.81. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 27% of John Day's stake. John Day was the only individual insider to sell over the last year.

Happily, we note that in the last year insiders paid US$281k for 17.61k shares. On the other hand they divested 12172 shares, for US$195k. In total, Invesco Mortgage Capital insiders bought more than they sold over the last year. 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!

NYSE:IVR Recent Insider Trading, February 10th 2020
NYSE:IVR Recent Insider Trading, February 10th 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

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. We usually like to see fairly high levels of insider ownership. Our data indicates that Invesco Mortgage Capital insiders own about US$6.9m worth of shares (which is 0.2% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Invesco Mortgage Capital Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Invesco Mortgage Capital stock. 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.

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.