Should You Take Comfort From Insider Transactions At Agilysys, Inc. (NASDAQ:AGYS)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Agilysys, Inc. (NASDAQ:AGYS), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.

See our latest analysis for Agilysys

Agilysys Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO, President & Director Ramesh Srinivasan for US$538k worth of shares, at about US$15.40 per share. So it’s clear an insider wanted to buy, at around the current price, which is US$18.95. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. The good news for Agilysys share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Ramesh Srinivasan.

Ramesh Srinivasan bought 55000 shares over the last 12 months at an average price of US$16.48. You can see the insider transactions (by 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!

NasdaqGS:AGYS Recent Insider Trading, April 19th 2019
NasdaqGS:AGYS Recent Insider Trading, April 19th 2019

Agilysys is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Agilysys Insiders Bought Stock Recently

Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Agilysys. In total, Ramesh Srinivasan bought US$368k worth of shares in that time. On the other hand, Keith Kolerus netted US$160k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Agilysys 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Agilysys insiders own about US$16m worth of shares. That equates to 3.6% 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.

So What Do The Agilysys Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Agilysys shares, given these transactions (along with notable insider ownership of the company). Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Agilysys.

Of course Agilysys may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.