Even if it's not a huge purchase, we think it was good to see that Jennifer Murphy, the President of Western Asset Mortgage Capital Corporation (NYSE:WMC) recently shelled out US$75k to buy stock, at US$7.54 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 12%.
Western Asset Mortgage Capital Insider Transactions Over The Last Year
In fact, the recent purchase by President Jennifer Murphy was not their only acquisition of Western Asset Mortgage Capital shares this year. They previously made an even bigger purchase of US$100k worth of shares at a price of US$9.98 per share. That means that even when the share price was higher than US$7.80 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months insiders purchased 23.50k shares for US$210k. But insiders sold 2925 shares worth US$30k. Overall, Western Asset Mortgage Capital insiders were net buyers last year. They paid about US$8.95 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Western Asset Mortgage Capital is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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. Our data suggests Western Asset Mortgage Capital insiders own 0.5% of the company, worth about US$1.9m. We consider this fairly low insider ownership.
What Might The Insider Transactions At Western Asset Mortgage Capital Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Western Asset Mortgage Capital stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for Western Asset Mortgage Capital (2 are a bit unpleasant!) that we believe deserve your full attention.
But note: Western Asset Mortgage Capital may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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