Should You Take Comfort From Insider Transactions At ACI Worldwide, Inc. (NASDAQ:ACIW)?
We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in ACI Worldwide, Inc. (NASDAQ:ACIW).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. 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'.
View our latest analysis for ACI Worldwide
ACI Worldwide Insider Transactions Over The Last Year
The President Odilon Almeida made the biggest insider purchase in the last 12 months. That single transaction was for US$748k worth of shares at a price of US$24.59 each. Even though the purchase was made at a significantly lower price than the recent price (US$41.32), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 33.04k shares worth US$848k. On the other hand they divested 12.27k shares, for US$446k. In total, ACI Worldwide insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
ACI Worldwide is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
ACI Worldwide Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of ACI Worldwide shares over the last three months. In total, Chief Product Officer Jeremy Miles Wilmot sold US$266k worth of shares in that time. Meanwhile Independent Director Charles Bobrinskoy bought US$100k worth. Generally this level of net selling might be considered a bit bearish.
Insider Ownership of ACI Worldwide
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that ACI Worldwide insiders own 2.3% of the company, worth about US$111m. 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 ACI Worldwide Tell Us?
Unfortunately, there has been more insider selling of ACI Worldwide stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that ACI Worldwide has 5 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.
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.
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. 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.
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