Alkami Technology Insiders Sell US$174m Of Stock, Possibly Signalling Caution

Many Alkami Technology, Inc. (NASDAQ:ALKT) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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Alkami Technology Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, George Kaiser, for US$94m worth of shares, at about US$37.50 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$28.34). So it may not shed much light on insider confidence at current levels.

Over the last year we saw more insider selling of Alkami Technology shares, than buying. You can see the insider transactions (by companies and 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!

View our latest analysis for Alkami Technology

I will like Alkami Technology better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

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. In total, insiders sold US$2.1m worth of shares in that time. Meanwhile Independent Director Joseph Payne bought US$250k worth , as we said above . Generally this level of net selling might be considered a bit bearish.

Insider Ownership Of Alkami Technology

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. Alkami Technology insiders own about US$179m worth of shares (which is 6.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Alkami Technology Insider Transactions Indicate?

The stark truth for Alkami Technology is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Alkami Technology has 1 warning sign and it would be unwise to ignore this.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.