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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Blackbaud, Inc. (NASDAQ:BLKB), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
Blackbaud Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the President, Michael Gianoni, for US$2.3m worth of shares, at about US$76.79 per share. That means that even when the share price was below the current price of US$85.49, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. This single sale was just 10% of Michael Gianoni’s stake.
In the last twelve months insiders netted US$7.6m for 97362 shares sold. Insiders in Blackbaud didn’t buy any shares in the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Insiders at Blackbaud Have Sold Stock Recently
The last three months saw some Blackbaud insider selling. Independent Director Timothy C. Chou only netted US$31k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn’t enough for us to put any weight on it.
Does Blackbaud Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Blackbaud insiders own about US$64m worth of shares. That equates to 1.6% 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 Blackbaud Tell Us?
We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we’re not concerned. Recent sales exacerbate our caution arising from analysis of Blackbaud insider transactions. The modest level of insider ownership is, at least, some comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Blackbaud.
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.