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Cluster of Insider Sales at IT Research Firm – Should You Sell? Guys at Baron Say No; Plus Other Insider Trading

Academics and analysts have been suggesting that one can become a better investor by learning how to monitor and interpret insider trading metrics. Thanks to some regulatory changes made in the not-so-distant past, it’s rather easy for everyone to find out whether a company’s top executives are buying or selling shares. But should we bother about what insiders do with their company’s shares?

Indeed, it would be nice to know if a company’s CEO and his or her colleagues are putting their own capital on the line before making your own investment. A number of research studies found that insider buying represents a powerful indicator that shares will climb. Moreover, insider trading pundits recommend that investors look for clusters of buying by multiple insiders, insider buying by long-serving employees as the stock price rises, and to avoid insider transactions conducted under pre-arranged trading plans. One could find further recommendations on how to find meaningful insider trading and analyze insider transactions, but those mentioned above seem to be the most important. With this in mind, let’s focus our attention towards a set of noteworthy insider transactions reported with the SEC on Thursday.

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CEO of Provider of Hospitality Software Solutions and Services Buys Shares

The man at the helm of Agilysys Inc. (NASDAQ:AGYS) acquired his first shares in the company earlier this week. Ramesh Srinivasan, appointed as the company’s President and CEO in mid-December 2016, snapped up a block of 9,576 shares on Tuesday and an additional 50,424 shares on Wednesday at prices varying from $9.19 to $9.91 per share. The shares are held in the Ramesh and Sujatha Srinivasan Living Trust.

Agilysys Inc. (NASDAQ:AGYS), a provider of next-generation hospitality software solutions and services, has seen its shares drop by 10% in the past 12 months. The technology company reported net revenue of $33.45 million for the three months ended December 31, up from $31.31 million reported a year earlier. Meanwhile, the company’s gross profit margin fell by around 417 basis points to 48.6%. When briefly skimming through the company’s financials, one could arrive at the conclusion that Agilysys isn’t likely to face financial hurdles in the near term. The company’s total debt was around $0.3 million at year-end – comprised of capital lease obligations, while cash on hand amounted to $52.7 million. Michael Kaufman’s MAK Capital One was the equity holder of 7.06 million shares of Agilysys Inc. (NASDAQ:AGYS) at the end of December.

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The second page of the Friday edition of our daily insider trading article discusses the fresh insider buying at two other companies.

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