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Should You Take Comfort From Insider Transactions At Auris Medical Holding Ltd. (NASDAQ:EARS)?

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Auris Medical Holding Ltd. (NASDAQ:EARS).

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

See our latest analysis for Auris Medical Holding

The Last 12 Months Of Insider Transactions At Auris Medical Holding

Founder Thomas Meyer made the biggest insider purchase in the last 12 months. That single transaction was for US$122k worth of shares at a price of US$2.83 each. That means that an insider was happy to buy shares at above the current price of US$1.37. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Thomas Meyer.

Thomas Meyer bought a total of 84.73k shares over the year at an average price of US$2.69. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NasdaqCM:EARS Recent Insider Trading, February 10th 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Auris Medical Holding Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 12% of Auris Medical Holding shares, worth about US$540k, according to our data. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Auris Medical Holding Insiders?

The fact that there have been no Auris Medical Holding insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Auris Medical Holding insiders are doubting the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Auris Medical Holding.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.