Those who follow with American Software, Inc. (NASDAQ:AMSW.A) will no doubt be intrigued by the recent purchase of shares by James Miller, the company’s independent chairman, who issued a whopping $2.6 million worth of shares at an average price of $8.98. That purchase increased their stake by 236%, leading us to wonder whether the move was motivated by quietly confident, deep-felt optimism.
View our latest analysis for American Software
American Software Insider’s transactions over the past year
Interestingly, that recent purchase by James Miller is the largest insider purchase of American Software shares that we’ve seen in the past year. That means that an insider was happy to buy shares at the current price of US$9.13. While their opinion may have changed since the purchase, it does suggest that they were confident in the company’s future. We always like to see insider purchases, but it’s worth noting whether those purchases were made at a price well below the current share price, as the discount to value may have narrowed as the price has risen. Fortunately, American Software insiders decided to buy shares at prices close to the current price.
American software insiders may have bought shares in the past year, but they didn’t sell any. The chart below shows insider transactions (by companies and individuals) over the past year. If you want to know exactly who sold, for how much and when, just click on the graph below!
There are always plenty of stocks that insiders are buying. If investing in lesser-known companies is your style, you can take a look here free list of companies. (Hint: insiders bought them).
Insider ownership
Many investors like to see how much of a company is owned by insiders. High insider ownership often means that a company’s management is more concerned with the interests of shareholders. Insiders own 6.9% of American Software shares, worth about US$21 million. While this is a strong but not exceptional level of insider ownership, it is enough to indicate some alignment between management and smaller shareholders.
What can American Software’s insider transactions tell us?
It’s good to see recent purchases. And an analysis of the past year’s worth of transactions also gives us confidence. Insiders likely see value in American Software stock, given these transactions (along with the company’s notable insider ownership). So while it’s useful to know what insiders are doing in terms of buying or selling, it’s also useful to know the risks that a particular company faces. In terms of investment risk, we have identified two warning signs with American Software and understanding this should be part of your investment process.
But watch out: American Software may not be the best stock to buy. So take a look at this free list of interesting companies with high return on equity and low debt burden.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. Currently, we only consider open market transactions and private dispositions involving direct interests, but not derivative transactions or indirect interests.
Do you have feedback on this article? Worried about the content? Please contact us directly with us. You can also email the editorial team (at) simplywallst.com.
This article from Simply Wall St is general in nature. We comment exclusively on the basis of historical data and analyst forecasts and use an objective methodology. Our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to bring you long-term oriented analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no position in the stocks mentioned.
Do you have feedback on this article? Worried about the content? Please contact us directly. You can also send an email to redactieteam@simplywallst.com