Yahoo Finance How Confident Are Insiders About Alteryx Inc (NYSE:AYX)?
Alteryx, Inc. operates a self-service data analytics software platform that enables organizations to enhance business outcomes and the productivity of their business analysts. Alteryx’s insiders have invested 870.00k shares in the large-cap stocks within the past three months. Generally, insiders buying more shares in their own firm sends a bullish signal. A two-decade research published in The MIT Press (1998) showed that stocks following insider buying outperformed the market by 4.5%. However, these signals may not be enough to gain conviction on whether to invest. I will be analysing whether these buying activities are supported by favourable future outlook and recent share price volatility. View out our latest analysis for Alteryx
Which Insiders Are Buying?
More shares have been bought than sold by Alteryx insiders in the past three months. In total, individual insiders own over 11.67 million shares in the business, which makes up around 19.25% of total shares outstanding.
Is Future Growth Outlook As Bullish?
At first glance, analysts’ earnings expectations of -29.94% over the next three years illustrates poor outlook for the company, however, this is contrary to the signal company insiders are sending with their net buying activity. Probing further into annual growth rates, Alteryx is believed to experience a sizeable revenue growth over the next year, which is not expected to flow into its earnings given the large negative growth. This indicates high levels of cost growth compared to revenues, which is typical during a period of investment and growth in the company. Insiders’ net buying activities seem to bolster the idea of growth moving forward. Or they may simply view the current share price as too low relative to its intrinsic value.
Can Share Price Volatility Explain The Buy?
Another factor we should consider is whether the timing of these insider transactions coincide with any significant share price movements. Volatility provides an opportunity to trade on market inefficiencies when the stock is under-priced compared to the stock’s intrinsic value. In the past three months, Alteryx’s share price reached a high of $40.6 and a low of $30.62. This suggests moderate volatility with a share price movement of 32.59%. Perhaps not a significant enough movement to warrant transactions, thus motivation may be a result of their belief in the company in the future or simply personal portfolio rebalancing.
Next Steps:
Alteryx’s insider meaningful buying activity tells us the shares are currently in favour, though negative growth in expected earnings contests this assumption, whereas a fairly volatile stock price could be a driver to transact. However, while insider transactions could be a helpful signal, it is definitely not sufficient on its own to make an investment decision. I’ve compiled two relevant factors you should look at:
Financial Health: Does Alteryx have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of Alteryx? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
