Don't Ignore The Insider Selling In Precision Optics Corporation

We note that the Precision Optics Corporation, Inc. (NASDAQ:POCI) Director, Peter Anania, recently sold US$72k worth of stock for US$5.00 per share. However we note that the sale only shrunk their holding by 9.4%.

Check out our latest analysis for Precision Optics Corporation

Precision Optics Corporation Insider Transactions Over The Last Year

Notably, that recent sale by Peter Anania is the biggest insider sale of Precision Optics Corporation shares that we've seen in the last year. That means that even when the share price was below the current price of US$5.11, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 9.4% of Peter Anania's stake.

In the last twelve months insiders purchased 7.77k shares for US$45k. But they sold 14.40k shares for US$72k. 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!

I will like Precision Optics Corporation better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Precision Optics Corporation

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Precision Optics Corporation insiders own about US$7.5m worth of shares. That equates to 23% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Precision Optics Corporation Tell Us?

An insider hasn't bought Precision Optics Corporation stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Precision Optics Corporation. When we did our research, we found 6 warning signs for Precision Optics Corporation (2 can't be ignored!) that we believe deserve your full attention.

Of course Precision Optics Corporation 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 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.