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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 Manhattan Associates, Inc. (NASDAQ:MANH).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Manhattan Associates
Over the last year, we can see that the biggest insider sale was by Executive VP Dennis Story for US$702k worth of shares, at about US$43.13 per share. That means that even when the share price was below the current price of US$55.50, an insider wanted to cash in some shares. Even though it doesn't necessarily mean anything, that's certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. We note that the biggest single sale was 71.6% of Dennis Story's holding.
Over the last year, we note insiders sold 39.15k shares worth US$1.9m. Over the last year we saw more insider selling of Manhattan Associates shares, than buying. They sold for an average price of about US$48.84. It's not ideal to see that insiders have sold at around the current price. But we don't put too much weight on the insider selling, since sellers could have personal reasons. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Manhattan Associates better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Manhattan Associates Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Manhattan Associates. In total, insiders dumped US$563k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the directors think that the shares are a bargain.
Does Manhattan Associates Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company 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. It appears that Manhattan Associates insiders own 0.6% of the company, worth about US$21m. 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 Manhattan Associates Insiders?
Insiders sold stock recently, but they haven't been buying. And even if we look to the last year, we didn't see any purchases. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Manhattan Associates, 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.
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 firstname.lastname@example.org. 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.