Insiders acquired stock in large numbers last year

When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Invesco Mortgage Capital Inc.’s (NYSE:IVR) instance, it’s good news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Invesco Mortgage Capital

The Last 12 Months Of Insider Transactions At Invesco Mortgage Capital

In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Director, John Day, sold US$67k worth of shares at a price of US$31.10 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$17.16. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was John Day.

In the last twelve months insiders purchased 4.95k shares for US$103k. But insiders sold 2.14k shares worth US$67k. In the last twelve months there was more buying than selling by Invesco Mortgage Capital insiders. Their average price was about US$20.87. I’d consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Invesco Mortgage Capital Have Bought Stock Recently

Over the last quarter, Invesco Mortgage Capital insiders have spent a meaningful amount on shares. In total, insiders bought US$57k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.

Story continues

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Invesco Mortgage Capital insiders have about 0.3% of the stock, worth approximately US$1.6m. We consider this fairly low insider ownership.

So What Do The Invesco Mortgage Capital Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Invesco Mortgage Capital insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Invesco Mortgage Capital. For instance, we’ve identified 5 warning signs for Invesco Mortgage Capital (2 are concerning) you should be aware of.

Of course Invesco Mortgage Capital may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.