Bag This Cheap 11.6% Yielder Even Lower Than CEO King Did

There's an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on June 4, Invesco Mortgage Capital Inc.'s CEO, Richard J. King, invested $46,603.78 into 2,657 shares of IVR, for a cost per share of $17.54. Bargain hunters tend to pay particular attention to insider buys like this one, because 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.

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In trading on Thursday, bargain hunters could buy shares of Invesco Mortgage Capital Inc. ( IVR) and achieve a cost basis 1.9% cheaper than King, with shares changing hands as low as $17.20 per share. It should be noted that King has collected $0.50/share in dividends since the time of their purchase, so they are currently up 0.9% on their purchase from a total return basis. Invesco Mortgage Capital Inc. shares are currently trading up about 0.7% on the day. The chart below shows the one year performance of IVR shares, versus its 200 day moving average:

Invesco Mortgage Capital Inc. Chart

Looking at the chart above, IVR's low point in its 52 week range is $14.41 per share, with $18.00 as the 52 week high point — that compares with a last trade of $17.31. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:

Purchased Insider Title Shares Price/Share Value
05/08/2014 Robson Kuster Chief Operating Officer 2,624 $16.98 $44,555.52
05/14/2014 John Anzalone CIO 4,000 $16.82 $67,296.40
05/19/2014 Richard Lee Phegley Jr. Chief Financial Officer 710 $17.04 $12,101.24
05/22/2014 Robson Kuster Chief Operating Officer 1,605 $17.27 $27,716.74
05/29/2014 Robson Kuster Chief Operating Officer 4,485 $17.70 $79,384.50
05/08/2014 Richard J. King President & CEO 5,500 $16.99 $93,445.00
06/04/2014 Richard J. King President & CEO 2,657 $17.54 $46,603.78

The current annualized dividend paid by Invesco Mortgage Capital Inc. is $2.00/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 06/25/2014. Below is a long-term dividend history chart for IVR, which can be of good help in judging whether the most recent dividend with approx. 11.6% annualized yield is likely to continue.

IVR+Dividend+History+Chart

According to the ETF Finder at ETF Channel, IVR makes up 3.76% of the Mortgage REIT Income ETF ( MORT) which is trading higher by about 0.2% on the day Thursday.

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