Despite a 10% gain in Federal Agricultural Mortgage Corporation's (NYSE:AGM) stock price this week, shareholders shouldn't let up. The fact that insiders chose to dispose of US$1.5m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Federal Agricultural Mortgage

Over the last year, we can see that the biggest insider sale was by the President & CEO, Bradford Nordholm, for US$1.3m worth of shares, at about US$180 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$200. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 38% of Bradford Nordholm's stake.

In the last twelve months insiders purchased 672.42 shares for US$85k. But they sold 8.47k shares for US$1.5m. All up, insiders sold more shares in Federal Agricultural Mortgage than they bought, over the last year. They sold for an average price of about US$179. We don't gain confidence from insider selling below the recent share price. But we wouldn't put too much weight on the insider selling. 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!

I will like Federal Agricultural Mortgage better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Federal Agricultural Mortgage Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.5% of Federal Agricultural Mortgage shares, worth about US$32m. 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 doesn't really mean much that no insider has traded Federal Agricultural Mortgage shares in the last quarter. Our analysis of Federal Agricultural Mortgage insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Federal Agricultural Mortgage. Every company has risks, and we've spotted 1 warning sign for Federal Agricultural Mortgage you should know about.

Of course Federal Agricultural Mortgage 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 of direct interests only, but not derivative transactions or indirect interests.

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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 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.

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