Insiders at Capital One Financial Corporation (NYSE: COF) may have anticipated weakness, dropping $ 5.5 million in shares even though prices were low


The value of Capital One Financial Corporation (NYSE: COF) fell 12% last week, but insiders who sold $ 5.5 million of shares in the past year were less successful. Insiders would probably have been better off holding their shares given that the average sale price of US $ 135 is still below the current share price.

While insider trading isn’t the most important thing when it comes to investing for the long term, we think it makes perfect sense to keep tabs on what insiders are doing.

Capital One Financial Insider Trading in the Past Year

Card chairman Michael Wassmer had the biggest insider sale in the past 12 months. This one-time transaction involved shares valued at US $ 2.8 million at a price of US $ 156 each. So we know that an insider sold shares around the current price of US $ 153. While insider selling is negative, for us it is even more negative if stocks are sold for a lower price. We note that this sale took place at roughly the current price, so this is not a major concern, although it is not a good sign.

Capital One Financial insiders have not bought any shares in the past year. The chart below shows insider trading (by businesses and individuals) over the past year. By clicking on the graph below, you can see the precise detail of each insider trade!

NYSE: COF Insider Trading Volume October 28, 2021

If you like to buy stocks that insiders buy rather than sell, then you might love this free list of companies. (Hint: insiders bought them).

Does Capital One Financial pride itself on strong insider participation?

I like to look at how many shares insiders own in a company, to help inform my perspective on their alignment with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will have an incentive to build the business for the long term. Capital One Financial insiders own around $ 651 million in shares (or 1.0% of the company). I like to see this level of insider ownership because it increases the chances that management is thinking in the best interests of shareholders.

So what does this data suggest about Capital One Financial insiders?

We certainly don’t mind the fact that there hasn’t been any recent insider trading from Capital One Financial. It’s great to see high levels of insider ownership, but looking back on last year, we’re not gaining the trust of Capital One Financial insiders selling. So these insider trading can help us build a stock thesis, but it’s also worth knowing the risks this business faces. Our analysis shows 2 warning signs for Capital One Financial (1 doesn’t suit us very well!) And we strongly recommend that you review them before investing.

Sure, you might find a fantastic investment looking elsewhere. So take a look at this free list of interesting companies.

For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.

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