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 shareholders might well want to know whether insiders have been buying or selling shares in Progress Software Corporation (NASDAQ:PRGS).
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, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
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Check out our latest analysis for Progress Software
Progress Software Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Non-Executive Chairman of the Board, John Egan, for US$2.0m worth of shares, at about US$45.30 per share. So what is clear is that an insider saw fit to sell at around the current price of US$42.19. While insider selling is a negative, to us, it is more negative if the shares are sold 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 netted US$3.1m for 68695 shares sold. Progress Software insiders didn’t buy any shares over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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 Progress Software Have Sold Stock Recently
The last quarter saw substantial insider selling of Progress Software shares. In total, insiders dumped US$3.0m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Progress Software Boast High Insider Ownership?
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Progress Software insiders own about US$24m worth of shares. That equates to 1.3% of the company. 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 Does This Data Suggest About Progress Software Insiders?
Insiders haven’t bought Progress Software stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. On the plus side, Progress Software makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Progress Software, you should check out this free report on analyst forecasts for the company.
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.
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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.