Potential ARMOUR Residential REIT, Inc. (NYSE:ARR) shareholders may wish to note that the Non-Executive Chairman, Daniel Staton, recently bought US$199k worth of stock, paying US$19.86 for each share. We reckon that's a good sign, especially since the purchase boosted their holding by 71%.

The Last 12 Months Of Insider Transactions At ARMOUR Residential REIT

In fact, the recent purchase by Non-Executive Chairman Daniel Staton was not their only trade of ARMOUR Residential REIT shares this year. Earlier in the year, they sold shares at a price ofUS$19.46 per share in a -US$1.2m transaction. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$19.76. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 85% of Daniel Staton's stake.

In the last twelve months insiders purchased 11.00k shares for US$218k. On the other hand they divested 61.68k shares, for US$1.2m. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of ARMOUR Residential REIT

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 0.6% of ARMOUR Residential REIT shares, worth about US$5.5m, according to our data. We do generally prefer see higher levels of insider ownership.

So What Do The ARMOUR Residential REIT Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. Neither the level of insider ownership, nor the transactions over the last twelve months inspire us, but we think the recent buying is positive. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 3 warning signs we've spotted with ARMOUR Residential REIT (including 1 which is a bit concerning).

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 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.