Some Perficient, Inc. (NASDAQ:PRFT) shareholders may be a little concerned to see that the Chief Operating Officer, Thomas Hogan, recently sold a substantial US$517k worth of stock at a price of US$42.51 per share. That's a big disposal, and it decreased their holding size by 15%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Perficient
In the last twelve months, the biggest single sale by an insider was when the Chairman, Jeffrey Davis, sold US$2.5m worth of shares at a price of US$42.84 per share. That means that an insider was selling shares at slightly below the current price (US$44.33). 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. 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. It is worth noting that this sale was only 12% of Jeffrey Davis's holding.
Over the last year, we can see that insiders have bought 1.90k shares worth US$80k. On the other hand they divested 107.83k shares, for US$4.6m. Over the last year we saw more insider selling of Perficient shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 2.5% of Perficient shares, worth about US$36m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Perficient Insiders?
The insider sales have outweighed the insider buying, at Perficient, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Perficient is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Perficient. In terms of investment risks, we've identified 2 warning signs with Perficient and understanding these should be part of your investment process.
But note: Perficient may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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