Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of MFA Financial, Inc. (NYSE:MFA), that sends out a positive message to the company’s shareholders.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for MFA Financial
MFA Financial Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Senior VP & Co-Controller, Mei Lin, for US$55k worth of shares, at about US$13.48 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$11.00). So it may not shed much light on insider confidence at current levels. Mei Lin was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$124k for 11.16k shares. On the other hand they divested 4.06k shares, for US$55k. In total, MFA Financial insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
MFA Financial 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.
Insiders At MFA Financial Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at MFA Financial. Overall, five insiders shelled out US$119k for shares in the company — and none sold. This is a positive in our book as it implies some confidence.
Looking at the total insider shareholdings in a company can help 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 incentivized to build the company for the long term. From our data, it seems that MFA Financial insiders own 0.7% of the company, worth about US$7.6m. While better than nothing, we’re not overly impressed by these holdings.
So What Do The MFA Financial 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 we don’t feel the same about the fact that the company is making losses. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that MFA Financial insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Be aware that MFA Financial is showing 2 warning signs in our investment analysisand 1 of those can’t be ignored…
If you would prefer to check out another company — one with potentially superior financials — then don’t 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.
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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 into account 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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