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Possible bearish signals as Capital One Financial Corporation (NYSE:COF) insiders disposed of US$1.4m worth of stock

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 evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Capital One Financial

The Last 12 Months Of Insider Transactions At Capital One Financial

Over the last year, we can see that the biggest insider sale was by the President of Commercial Banking, Neal Blinde, for US$921k worth of shares, at about US$115 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$91.12). So it may not shed much light on insider confidence at current levels. Notably Neal Blinde was also the biggest buyer, having purchased US$3.7k worth of shares.

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All up, insiders sold more shares in Capital One Financial than they bought, 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!

insider-trading-volume
insider-trading-volume

I will like Capital One Financial better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Capital One Financial Insiders Are Selling The Stock

The last three months saw significant insider selling at Capital One Financial. In total, President of Commercial Banking Neal Blinde sold US$921k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Capital One Financial 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. It's great to see that Capital One Financial insiders own 1.3% of the company, worth about US$436m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Capital One Financial Tell Us?

An insider hasn't bought Capital One Financial stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 4 warning signs for Capital One Financial you should be aware of, and 1 of them makes us a bit uncomfortable.

But note: Capital One Financial 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.

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

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.

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