Investors who take an interest in Aware, Inc. (NASDAQ:AWRE) should definitely note that the Independent Director, John Stafford, recently paid US$2.61 per share to buy US$115k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 1.0%.
The Last 12 Months Of Insider Transactions At Aware
Notably, that recent purchase by Independent Director John Stafford was not the only time they bought Aware shares this year. They previously made an even bigger purchase of US$3.6m worth of shares at a price of US$2.91 per share. That means that an insider was happy to buy shares at above the current price of US$2.40. 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 insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Notably John Stafford was also the biggest seller.
In the last twelve months insiders purchased 1.35m shares for US$3.9m. But they sold 1310908 shares for US$3.8m. Overall, Aware insiders were net buyers last year. 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!
Aware is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Aware Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Aware insiders own 27% of the company, worth about US$14m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Aware Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Aware insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for Aware you should be aware of, and 1 of these is significant.
Of course Aware may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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