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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. 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 we’ll take a look at whether insiders have been buying or selling shares in Perficient, Inc. (NASDAQ:PRFT).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Perficient
Perficient Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chairman, Jeffrey Davis, sold US$1.7m worth of shares at a price of US$29.20 per share. So what is clear is that an insider saw fit to sell at around the current price of US$29.15. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.
In the last twelve months insiders purchased 7806 shares for US$199k. On the other hand they divested 140k shares, for US$3.9m. Over the last year we saw more insider selling of Perficient shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Perficient Have Sold Stock Recently
There was substantially more insider selling, than buying, of Perficient shares over the last three months. We note insiders cashed in US$2.8m worth of shares. On the flip side, Independent Director Gary Wimberly spent US$25k on purchasing shares. Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the shares are not cheap.
Does Perficient 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. We usually like to see fairly high levels of insider ownership. It appears that Perficient insiders own 3.5% of the company, worth about US$34m. 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 Perficient Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Perficient stock, than buying, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. But since Perficient is profitable and growing, we’re not too worried by this. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’d think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Perficient.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.