New form 4 filings with the SEC revealed that Apptio Inc (Nasdaq: APTI) insiders have been selling large quantities of stock since early November. With shares up 52.6% in the last six months, it’s worth taking a closer look at the company.
Insider Selling: Apptio Inc
A number of top executives have been selling shares of Apptio Inc according to filings with the SEC including Kurt Shintaffer (CFO), John Morrow (VP), Lawrence Blasko (CRO), and Matthew McIlwain (Director). These individuals sold $3.4 million worth of stock in the last week which is what initially triggered the alert.
| Insider Trading | Relationship | Date | #Shares | Value ($) |
|---|---|---|---|---|
| Kurt Shintaffer | CFO | Feb 14 | 20,000 | $503,870 |
| Kurt Shintaffer | CFO | Feb 13 | 20,000 | $499,032 |
| Kurt Shintaffer | CFO | Feb 12 | 20,000 | $500,997 |
| John Morrow | VP, General Counsel | Feb 12 | 13,125 | $323,656 |
| Lawrence Blasko | Chief Revenue Officer | Feb 12 | 30,000 | $752,121 |
| Matthew McIlwain | Director | Feb 12 | 15,000 | $370,928 |
| Matthew McIlwain | Director | Feb 09 | 10,100 | $252,150 |
| Matthew McIlwain | Director | Feb 08 | 7,400 | $186,905 |
| TOTAL | 135,625 | $3,389,659 |
After taking a closer look, I found that a total of $22.3 million has been sold by insiders since early November which is approximately 2.2% of Apptio Inc’s total market capitalization.
Why Are Executives Selling Shares?
Apptio provides cloud-based technology business management solutions to enterprises. Its cloud-based platform and SaaS applications enable IT leaders to analyze, optimize, and plan technology investments, and to benchmark their financial and operational performance against peers. The company was founded in 2007 and is headquartered in Bellevue, Washington.
The company’s shares last traded at $26.59 as of Thursday, up 79.1% over the last year. While the stock has made impressive gains, the recent insider transactions could suggest a troubling road ahead for stockholders.
In addition, finbox.io’s average fair value estimate of $19.40 implies -27.0% downside and is calculated from 7 valuation models as shown in the table below. Each analysis uses consensus Wall Street estimates for the projections when available.
| Analysis | Model Fair Value | Upside (Downside) |
|---|---|---|
| 10-yr DCF Revenue Exit | $22.88 | -13.9% |
| 5-yr DCF Revenue Exit | $27.60 | 3.8% |
| Peer Revenue Multiples | $24.14 | -9.2% |
| 10-yr DCF EBITDA Exit | $15.71 | -40.9% |
| 5-yr DCF EBITDA Exit | $17.05 | -35.9% |
| 10-yr DCF Growth Exit | $13.97 | -47.5% |
| 5-yr DCF Growth Exit | $14.49 | -45.5% |
| Average | $19.40 | -27.0% |
| Median | $17.05 | -35.9% |
While individual buys and sells among insiders is not necessarily noteworthy, a major trend in buying or selling by corporate insiders could provide useful insights into the future prospects of a company. It certainly appears noteworthy as a number of Apptio Inc insiders are selling shares.
Here are a few additional items that you should consider before drawing a conclusion:
Valuation: what is Apptio’s price to book ratio and how does it compare to its peers? Analyze Price / Book here.
Forecast: what is Apptio’s projected EBITDA margin? Is the company expected to improve its profitability going forward? Analyze the company’s projected EBITDA margin here.
Efficiency Metrics: is management becoming more or less efficient in creating value for the firm? Find out by analyzing the company’s return on invested capital ratio here.
Author: Brian Dentino
Expertise: financial technology, analyzing market trends
Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors.
Brian can be reached at brian@finbox.io.
As of this writing, Brian did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.