While it's been a great week for Alkami Technology, Inc. (NASDAQ:ALKT) shareholders after stock gained 4.7%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell US$2.9m worth of stock in the past 12 months. This could be a sign of impending weakness.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Alkami Technology
The Last 12 Months Of Insider Transactions At Alkami Technology
The insider, Michael Hansen, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$13.53 each. That means that even when the share price was below the current price of US$16.78, an insider wanted to cash in some shares. 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. We note that the biggest single sale was only 12% of Michael Hansen's holding.
Over the last year, we can see that insiders have bought 62.47k shares worth US$769k. But they sold 220.50k shares for US$2.9m. In total, Alkami Technology insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Alkami Technology Insiders Are Selling The Stock
Over the last three months, we've seen notably more insider selling, than insider buying, at Alkami Technology. We note insiders cashed in US$2.0m worth of shares. On the flip side, CFO & Treasurer W. Hill spent US$519k on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Alkami Technology insiders own 4.0% of the company, worth about US$62m. 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 Alkami Technology Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Alkami Technology stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Alkami Technology. Case in point: We've spotted 3 warning signs for Alkami Technology you should be aware of.
But note: Alkami Technology 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.