Investors who take an interest in Chimera Investment Corporation (NYSE:CIM) should definitely note that the Independent Chairman of the Board, Gerard Creagh, recently paid US$13.31 per share to buy US$166k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 10.0%.

Chimera Investment Insider Transactions Over The Last Year

The insider Jack Macdowell made the biggest insider purchase in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$14.91 each. That means that an insider was happy to buy shares at above the current price of US$13.63. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Chimera Investment insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Chimera Investment insiders own 1.5% of the company, worth about US$17m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Chimera Investment Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Chimera Investment we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Chimera Investment. To help with this, we've discovered 2 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in Chimera Investment.

But note: Chimera Investment 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 of direct interests only, but not derivative transactions or indirect interests.

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