Insiders Who Sold US$2.3m Of Perdoceo Education Made The Right Call

While it’s been a great week for Perdoceo Education Corporation (NASDAQ:PRDO) shareholders after stock gained 12%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell US$2.3m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Perdoceo Education

Perdoceo Education Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President, Todd Nelson, sold US$852k worth of shares at a price of US$17.77 per share. That means that even when the share price was below the current price of US$23.34, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. We note that the biggest single sale was only 19% of Todd Nelson's holding.

Insiders in Perdoceo Education didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Perdoceo Education Have Sold Stock Recently

The last quarter saw substantial insider selling of Perdoceo Education shares. Specifically, Senior VP Ashish Ghia ditched US$217k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Perdoceo Education

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Perdoceo Education insiders own about US$99m worth of shares. That equates to 6.5% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Perdoceo Education Insiders?

An insider hasn't bought Perdoceo Education stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, Perdoceo Education makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 3 warning signs for Perdoceo Education (1 shouldn't be ignored!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com