We recently compiled a list of the 10 Mid-Cap Stocks Insiders Are Selling Recently. In this article, we are going to take a look at where C3.ai, Inc. (NYSE:AI) stands against the other feminist stocks. We previously covered 10 Mid-Cap Stocks Insiders Are Buying Recently.
Why should investors analyze insider trading activity? Insiders, or people in high positions within a company—such as executives and directors—can have crucial insights into the company’s strategic moves, plans, and initiatives. When, for example, a CEO invests their own capital in company stocks, it can indicate strong confidence in the company’s future results.
What does it mean when insiders are selling their shares? It doesn’t necessarily mean bad news for the stock. Sometimes, large shareholders just want to trim their holdings to more appropriate position sizes based on the risk/reward potential.
It is important to note that both insider selling and buying can be driven by various motives. Therefore, any insider trading activity should be analyzed within the broader context of the company’s fundamentals, industry trends, and overall market conditions. Many insider purchases don’t necessarily mean the company will be successful. That’s why due diligence before any investment is of the utmost importance. Investors should also take into account and carefully analyze underlying reasons for insider transactions. However, insider trading activity in combination with other relevant factors can offer valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
To identify the 10 mid-cap stocks insiders are selling recently, we considered only stocks with a market capitalization of between $2 billion and $10 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders buying over the last two months.
With each stock we note the number of recent insider sales and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
A computer engineer debugging a complex AI application on a powerful workstation.
C3.ai, Inc. (NYSE:AI)
Number of Insiders Selling: 8
Market Capitalization: $4.343B
C3.ai, Inc. is an Enterprise AI software provider focused on accelerating digital transformation. It offers services to build enterprise-scale AI applications, and its C3 AI Platform supports the value chain in any industry with AI applications for reliability, fraud detection, sensor network health, and customer and energy management. The company was founded in 2009 in California and went public in 2020. Since its initial public offering five years ago, C3.ai shares lost 72%.
In December and January, eight insiders, including the CEO and CFO, sold around $55.69 million worth of C3.ai shares at an average price of $37.28 per share. Out of the aggregate amount M Thomas Siebel, the company’s CEO, sold $22.88 million worth of shares at a price of around $31.73. The stock is currently trading at $33.48 per share, having lost 2.76% year-to-date. This way, Siebel reduced his ownership to $1.76 million worth of shares, as of January 15th.
For its fiscal second quarter ended October 31, 2024, the company reported total revenue of $94.3 million, an increase of 29% compared to $73.2 million one year ago. In December, C3.ai announced that in partnership with ECS, an IT systems integrator will work together to modernize information collection management processes for Army Intelligence.
Why are insiders selling C3.ai? Some analysts expressed concerns that the AI stock market bubble will burst in 2026, and therefore have downgraded their targeted market prices. In addition to market saturation, the AI industry faces potential regulatory challenges and geopolitical tensions.
On the other hand, a recent study from Cisco Systems Inc (NASDAQ:CSCO) revealed that 97% of CEOs plan to integrate AI into their operations, but only 1.7% feel fully prepared. They worry that their lack of AI understanding could negatively affect important decision-making in the boardroom. This might signal that once CEOs get more familiar with AI, the demand will grow again. According to data from Stock Analysts, 13 analysts have “Hold” as the average rating for AI stock, and the 12-month targeted price is $36.75 per share.
Overall AI ranks 10th on our list of the mid-cap stocks insiders are selling recently. While we acknowledge the potential of AI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.