Insiders Are Selling Shares Of Apptio Inc (Nasdaq: APTI). Time To Sell?

in INVESTING IDEAS by

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.

Recent Apptio, Inc. Insider Transactions
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.

Apptio Inc Stock Price Chart

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.

Apptio Inc Valuation Detail
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.

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 or at +1 (516) 778-6257.

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