We’d be surprised if Computer Programs and Systems, Inc. (NASDAQ:CPSI) shareholders haven’t noticed that the CFO, Secretary & Treasurer, Matt Chambless, recently sold US$334k worth of stock at US$29.50 per share. That sale was 29% of their holding, so it does make us raise an eyebrow.
Computer Programs and Systems Insider Transactions Over The Last Year
In fact, the recent sale by CFO, Secretary & Treasurer Matt Chambless was not their only sale of Computer Programs and Systems shares this year. They previously made an even bigger sale of -US$368k worth of shares at a price of US$28.34 per share. That means that even when the share price was below the current price of US$29.66, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 25% of Matt Chambless’s stake.
Computer Programs and Systems insiders didn’t buy any shares 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!
NasdaqGS:CPSI Insider Trading Volume November 14th 2020
I will like Computer Programs and Systems better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 5.2% of Computer Programs and Systems shares, worth about US$22m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Computer Programs and Systems Insider Transactions Indicate?
Insiders haven’t bought Computer Programs and Systems stock in the last three months, but there was some selling. And there weren’t any purchases to give us comfort, over the last year. But it is good to see that Computer Programs and Systems is growing earnings. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. So we’d only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. You’d be interested to know, that we found 2 warning signs for Computer Programs and Systems and we suggest you have a look.
But note: Computer Programs and Systems 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.
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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