A particularly strong insider buying signal is what we call a “cluster-buy” where three or more different insiders make open market purchases within a short period of one another. At Dynex Capital, Inc. (DX), 5 different insiders purchased 34,932 shares at an average price of $5.90/share, for a total of $206,099, with the most recent purchase on January 31, 2019.
Presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money. So when multiple insiders all decide to make purchases around the same time, it could be a strong indication that the stock is undervalued. Below is a table summarizing the insider buys that make up this “cluster”:
|01/31/2019||David H. Stevens||Director||2,000||$5.90||$11,800.00|
|01/31/2019||Smriti Laxman Popenoe||EVP and Co-CIO||2,542||$5.90||$14,997.80|
|01/31/2019||Stephen J. Benedetti||EVP, CFO and COO||10,000||$5.90||$59,000.00|
|01/31/2019||Byron L. Boston||CEO, President and co-CIO||17,000||$5.90||$100,300.00|
The chart below shows the one year performance of DX shares, versus its 200 day moving average. Note that DX’s low point in its 52 week range is $5.5649 per share, with $6.82 as the 52 week high point — that compares with a last trade of $6.17, with shares currently trading up about 0.8% on the day.
The current annualized dividend paid by Dynex Capital, Inc. is $0.24/share, currently paid in quarterly installments, and its most recent dividend has an upcoming ex-date of 02/13/2019. Below is a long-term dividend history chart for DX, which can be of good help in judging whether the most recent dividend with approx. 3.9% annualized yield is likely to continue.