Have Insiders Been Selling Computer Programs and Systems, Inc. (NASDAQ:CPSI) Shares This Year?

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Computer Programs and Systems, Inc. (NASDAQ:CPSI).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Computer Programs and Systems

Computer Programs and Systems Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CFO, Secretary & Treasurer, Matt Chambless, sold US$368k worth of shares at a price of US$28.34 per share. That means that even when the share price was below the current price of US$31.07, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 25% of Matt Chambless's holding.

Insiders in Computer Programs and Systems didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Computer Programs and Systems better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Computer Programs and Systems Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Computer Programs and Systems insiders own about US$22m worth of shares. That equates to 5.1% 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.

What Might The Insider Transactions At Computer Programs and Systems Tell Us?

It doesn't really mean much that no insider has traded Computer Programs and Systems shares in the last quarter. Our analysis of Computer Programs and Systems insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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, but not derivative transactions.

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