Insiders Buy Annaly Capital Management Shares After Earnings

• The post-earnings rise and fall at a leading mortgage REIT brought out some insiders.
• Two top executives have acquired 130,000 shares so far this month.
• Insider buying often can be seen as a good sign for investors.

Conventional wisdom says that insiders and 10 percent owners really only buy shares of a company for one reason: They believe the stock price will rise and they want to profit from it. So, insider buying can be an encouraging signal for potential investors, particularly during periods of uncertainty. Case in point: recent notable buys at Annaly Capital Management, Inc. NLY.

The chief investment officer and the chief credit officer together have bought 130,000 shares of the mortgage real estate investment trust (REIT) so far this month. The share prices for those purchases ranged from $10.15 to $10.30. That cost them almost $1.3 million. The buys came in the wake of a third-quarter report that included per-share earnings in line with expectations but lower than a year ago, offset by a double-digit percentage gain in revenue.

Annaly Capital Management currently has a market capitalization near $10 billion and offers a dividend yield of about 10.5 percent. Short interest is less than 3 percent of the float, and the consensus recommendation of analysts is to hold shares. The stock has retreated about 2 percent in the past week, and about 10 percent from a 52-week high of $11.29 back in August, to the $10.09, where it ended trading last week.

Disclosure: At the time of this writing, the author had no position in the mentioned equities.