We often see insiders buying up shares in companies that perform well over the long term. 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 we’ll take a look at whether insiders have been buying or selling shares in ClearOne, Inc. (NASDAQ:CLRO).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
ClearOne Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Edward Bagley bought US$3.0m worth of shares at a price of US$1.20 per share. That means that an insider was happy to buy shares at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price.
Over the last year, we can see that insiders have bought 3.64m shares worth US$4.4m. But insiders sold 3.77k shares worth US$4.7k. In total, ClearOne insiders bought more than they sold over the last year. They paid about US$1.20 on average. Although they bought at below the recent price of US$1.48 per share, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
ClearOne is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
ClearOne Insiders Bought Stock Recently
At ClearOne,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent US$4.4m on shares. On the other hand, Larry Hendricks netted US$4.7k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 28% of ClearOne shares, worth about US$6.9m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About ClearOne Insiders?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest ClearOne insiders are well aligned, and that they may think the share price is too low. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
But note: ClearOne may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
To help readers see past 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. For errors that warrant correction please contact the editor at email@example.com.