Insider Buyers Lose Additional US$103k As Universal Electronics Dips To US$66m

The recent 20% drop in Universal Electronics Inc.'s (NASDAQ:UEIC) stock could come as a blow to insiders who purchased US$392.3k worth of stock at an average buy price of US$6.78 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$289.1k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Universal Electronics

In the last twelve months, the biggest single purchase by an insider was when Independent Chairman of the Board Eric Singer bought US$162k worth of shares at a price of US$6.73 per share. That means that even when the share price was higher than US$5.00 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. 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.

Happily, we note that in the last year insiders paid US$392k for 57.83k shares. But they sold 30.24k shares for US$339k. In the last twelve months there was more buying than selling by Universal Electronics insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Universal Electronics

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Universal Electronics Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Universal Electronics, over the last three months. In fact, two insiders bought US$392k worth of shares. On the other hand, Head of Global Compliance Richard Firehammer netted US$12k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Universal Electronics Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 6.6% of Universal Electronics shares, worth about US$4.3m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Universal Electronics Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Universal Electronics insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Universal Electronics. At Simply Wall St, we found 1 warning sign for Universal Electronics that deserve your attention before buying any shares.

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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.