Aehr Test Systems' (NASDAQ:AEHR) stock dropped 10% this week, offering solace to those who sold earlier in the year

Despite the fact that Aehr Test Systems' (NASDAQ:AEHR) value has dropped 10% in the last week insiders who sold US$18m worth of stock in the past 12 months have had less success. The average selling price of US$30.97 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Aehr Test Systems

The Last 12 Months Of Insider Transactions At Aehr Test Systems

In the last twelve months, the biggest single sale by an insider was when the insider, Mario Rosati, sold US$3.6m worth of shares at a price of US$36.42 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$32.03). So it is hard to draw any strong conclusion from it.

Insiders in Aehr Test Systems didn't buy any shares in 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Aehr Test Systems Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Aehr Test Systems shares. In total, insiders dumped US$14m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Aehr Test Systems Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Aehr Test Systems insiders own about US$59m worth of shares. That equates to 6.6% 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?

Insiders haven't bought Aehr Test Systems stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Aehr Test Systems is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Aehr Test Systems has 4 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.