Don't Ignore The Fact That This Insider Just Sold Some Shares In Pegasystems Inc. (NASDAQ:PEGA)

We'd be surprised if Pegasystems Inc. (NASDAQ:PEGA) shareholders haven't noticed that an insider, Kerim Akgonul, recently sold US$286k worth of stock at US$128 per share. On the bright side, that sale was only 4.7% of their holding, so we doubt it's very meaningful, on its own.

Check out our latest analysis for Pegasystems

Pegasystems Insider Transactions Over The Last Year

The COO & CFO, Kenneth Stillwell, made the biggest insider sale in the last 12 months. That single transaction was for US$461k worth of shares at a price of US$118 each. That means that even when the share price was below the current price of US$129, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 31% of Kenneth Stillwell's holding.

In the last year Pegasystems insiders didn't buy any company stock. 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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Insider Ownership of Pegasystems

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. It's great to see that Pegasystems insiders own 50% of the company, worth about US$5.2b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Pegasystems Tell Us?

Insiders sold Pegasystems shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pegasystems. Every company has risks, and we've spotted 2 warning signs for Pegasystems (of which 1 makes us a bit uncomfortable!) you should know about.

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, but not derivative transactions.

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