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Over the past year, many Capital One Financial Corporation (NYSE:COF) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Capital One Financial
The insider, Ravi Raghu, made the biggest insider sale in the last 12 months. That single transaction was for US$4.1m worth of shares at a price of US$165 each. That means that even when the share price was below the current price of US$188, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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. We note that the biggest single sale was only 48% of Ravi Raghu's holding.
Capital One Financial insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Capital One Financial
I will like Capital One Financial 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 Capital One Financial Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Capital One Financial insiders own about US$847m worth of shares (which is 1.2% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.