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 SoundHound AI, Inc. (NASDAQ:SOUN) 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 software engineer focused on a computer screen, writing code to create a conversational assistant.
SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Insiders Selling: 8
Market Capitalization: $6.21B
SoundHound AI is yet another AI company among mid-cap stocks that insiders have been ditching recently. Last December, as many as eight insiders, including CEO, CFO, COO, and CTO sold $31.98 million worth of shares at an average price of $19.24 per share. The stock is now trading at $15.01 per share, having lost 24.29% year-to-date.
The company’s CEO, Keyvan Mohajer, sold 742,876 shares worth around $12.62 million, and he remained with 2.02 million of the company’s shares.
The voice artificial intelligence company was founded in 2005, and it went public in 2022. Since then, its shares have grown 130%. The company offers voice AI solutions that enable businesses to offer conversational experiences to their customers. SoundHound’s voice AI is built on proprietary technology and comes in numerous languages. It also offers AI-driven products like Smart Answering, Smart Ordering and Dynamic Interaction, providing millions of products and services and processing billions of interactions each year for remarkable businesses.
As per data from Stock Analysis, six analysts have an average “Buy” rating on the stock, with a 12-month stock price target of $13.25.
Even Nvidia (NASDAQ:NVDA), a computer manufacturing giant with a market capitalization of $3.29 trillion holds a stake in SoundHound. The company’s technology is used across various industries and by renowned brands such as Kia and Hyundai in the automotive sector, Krispy Kreme, and Dine Brands Global’s Applebee’s in the restaurant space.
Over the past 12 months, the company’s shares gained 548.72%.
Overall SOUN ranks 6th on our list of the mid-cap stocks insiders are selling recently. While we acknowledge the potential of SOUN 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 SOUN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.