NEW YORK (Reuters) - Insiders at Fannie Mae FNM.N have embarked on an unusual buying spree of shares of the largest U.S. home funding company over the past two weeks, even as the stock hovers near its lowest level in more than a decade.
In the past two weeks, 15 executives and directors at Fannie have purchased more than 66,000 shares of the company, worth about $2.2 million, according to U.S. Securities and Exchange Commission filings.
“It’s unusual at any company to see that many insiders step up at the same time and buy,” said Ben Silverman, director of research at filing tracking site InsiderScore.com.
“There hasn’t been a buy there since July of 2003 and that was a very small amount then. I think they’re trying to send a message.”
But the question for investors is whether this expression of confidence by insiders is being noticed, Silverman said. Investors have been increasingly concerned about how Fannie is weathering the deterioration in the housing and credit markets.
A Fannie Mae spokesman did not respond to requests for comment about why the insiders were buying.
On an individual basis, the Fannie insiders have made purchases of less than 1,000 shares to about 15,000 shares and paid prices ranging from $28.50 to $49.34 for the stock.
Fannie’s chief executive Daniel Mudd, chief financial officer Stephen Swad and chief operating officer Michael Williams have all been among the buyers.
“They’re small sort of polite insider buys,” Silverman said. “If the market conditions were different, I would say this is very exciting buying, but there’s so much uncertainty in the air regarding the mortgage issues, credit markets and the like.”
By contrast, there have not been any open market stock purchases by individual corporate executives at Freddie Mac FRE.N, the second largest provider of financing for U.S. home loans, since at least 1998, according to InsiderScore.
While corporate insiders tend to invest in their companies for the long-term, already some of the insider stock purchases have failed to deliver profits for the Fannie executives.
Dennis Beresford, former chairman of the Financial Accounting Standards Board, was the first Fannie director to purchase shares on Nov. 14. He bought 4,000 shares at $49.33 to $49.34 each.
Fannie shares closed well below those prices on the New York Stock Exchange on Tuesday at $29.40 per share.
“That’s a perfect example of how there’s sort of an inherent danger in these kinds of stocks right now,” Silverman added.
Reporting by Emily Chasan; editing by Andre Grenon