Insiders At Manhattan Associates Sold US$26m In Stock, Alluding To Potential Weakness

Over the past year, many Manhattan Associates, Inc. (NASDAQ:MANH) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Manhattan Associates

The Last 12 Months Of Insider Transactions At Manhattan Associates

The President, Eddie Capel, made the biggest insider sale in the last 12 months. That single transaction was for US$11m worth of shares at a price of US$251 each. That means that even when the share price was below the current price of US$257, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 55% of Eddie Capel's holding.

Insiders in Manhattan Associates 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Manhattan Associates Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Manhattan Associates shares. In total, Executive Vice President of Professional Services - Americas J. Gantt sold US$1.5m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Manhattan Associates

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. It's great to see that Manhattan Associates insiders own 0.8% of the company, worth about US$126m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Manhattan Associates Insiders?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Manhattan Associates is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Manhattan Associates you should be aware of.

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.