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 we'll take a look at whether insiders have been buying or selling shares in Federal Agricultural Mortgage Corporation (NYSE:AGM).
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.
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'.
The Last 12 Months Of Insider Transactions At Federal Agricultural Mortgage
Notably, that recent purchase by Robert Sexton is the biggest insider purchase of Federal Agricultural Mortgage shares that we've seen in the last year. That implies that an insider found the current price of US$72.60 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. 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. Happily, the Federal Agricultural Mortgage insiders decided to buy shares at close to current prices.
In the last twelve months insiders purchased 2.85k shares for US$206k. But insiders sold 800 shares worth US$64k. Overall, Federal Agricultural Mortgage insiders were net buyers last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Federal Agricultural Mortgage is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Federal Agricultural Mortgage Insiders Bought Stock Recently
Over the last quarter, Federal Agricultural Mortgage insiders have spent a meaningful amount on shares. In total, insiders bought US$206k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership of Federal Agricultural Mortgage
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.0% of Federal Agricultural Mortgage shares, worth about US$15m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Federal Agricultural Mortgage Tell Us?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Federal Agricultural Mortgage insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Federal Agricultural Mortgage, you should check out this free report on analyst forecasts for the company.
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.
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