Don't Ignore The Insider Selling In Aehr Test Systems

Anyone interested in Aehr Test Systems, Inc. (NASDAQ:AEHR) should probably be aware that the Independent Director, Laura Oliphant, recently divested US$108k worth of shares in the company, at an average price of US$21.50 each. That sale was 24% of their holding, so it does make us raise an eyebrow.

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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. Even though the purchase was made at a significantly lower price than the recent price (US$21.74), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Over the last year we saw more insider selling of Aehr Test Systems shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Aehr Test Systems

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Insider Ownership Of Aehr Test Systems

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Aehr Test Systems insiders own 5.9% of the company, worth about US$39m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Aehr Test Systems Insider Transactions Indicate?

Insiders sold Aehr Test Systems shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. 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 example - Aehr Test Systems has 2 warning signs we think you should be aware of.

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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.