Atomos' Recent Gains Improve Losses On Insider Purchases Worth AU$2.04m

Insiders who purchased AU$2.04m worth of Atomos Limited (ASX:AMS) shares over the past year recouped some of their losses after price gained 50% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at AU$1.4m since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

We've discovered 6 warning signs about Atomos. View them for free.

The Last 12 Months Of Insider Transactions At Atomos

The Co-Founder Jeromy Young made the biggest insider purchase in the last 12 months. That single transaction was for AU$2.0m worth of shares at a price of AU$0.02 each. That means that an insider was happy to buy shares at above the current price of AU$0.006. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid AU$2.0m for 101.14m shares. But insiders sold 100.00k shares worth AU$10.0k. In total, Atomos insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Atomos

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does Atomos Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 22% of Atomos shares, worth about AU$1.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Atomos Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Atomos and we see no evidence to suggest they are worried about the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 6 warning signs that you should run your eye over to get a better picture of Atomos.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.