Aehr Test Systems Insiders Recover Some Losses, Which Stand At US$55k

Insiders who bought US$461.4k worth of Aehr Test Systems, Inc. (NASDAQ:AEHR) stock in the last year recovered part of their losses as the stock rose by 17% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$55k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Aehr Test Systems

Aehr Test Systems Insider Transactions Over The Last Year

The Independent Director Howard Slayen made the biggest insider purchase in the last 12 months. That single transaction was for US$310k worth of shares at a price of US$15.50 each. That means that an insider was happy to buy shares at above the current price of US$14.49. 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$461k for 28.04k shares. On the other hand they divested 20.00k shares, for US$361k. In total, Aehr Test Systems insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Aehr Test Systems is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Aehr Test Systems insiders own about US$20m worth of shares. That equates to 5.9% of the company. 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 Aehr Test Systems Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Aehr Test Systems insiders are doubting the company, and they do own shares. 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. For instance, we've identified 3 warning signs for Aehr Test Systems (1 makes us a bit uncomfortable) you should be aware of.

Of course Aehr Test Systems 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.