Maximus Insiders Sold US$4.1m Of Shares Suggesting Hesitancy

In the last year, many Maximus, Inc. (NYSE:MMS) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Maximus

The Last 12 Months Of Insider Transactions At Maximus

In the last twelve months, the biggest single sale by an insider was when the President, Bruce Caswell, sold US$1.6m worth of shares at a price of US$74.68 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$91.74. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 8.3% of Bruce Caswell's stake.

All up, insiders sold more shares in Maximus than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Are Maximus Insiders Buying Or Selling?

Over the last three months, we've seen a bit of insider buying at Maximus. Independent Director Gayathri Rajan bought US$5.4k worth of shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Maximus insiders own about US$61m worth of shares. That equates to 1.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Maximus Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. We don't take much encouragement from the transactions by Maximus insiders. But it's good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Maximus and understanding this should be part of your investment process.

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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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.