Insiders who purchased Applied Blockchain, Inc. (NASDAQ:APLD) earlier this year lose an additional US$49k as the stock sinks to US$2.11

The recent 11% drop in Applied Blockchain, Inc.'s (NASDAQ:APLD) stock could come as a blow to insiders who purchased US$220k worth of stock at an average buy price of US$2.71 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$171k, 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.

If you're not interested in researching APLD's insider transactions, we have a free list of interesting investing ideas to potentially inspire your next investment!

The Last 12 Months Of Insider Transactions At Applied Blockchain

Over the last year, we can see that the biggest insider purchase was by Independent Director Virginia Moore for US$115k worth of shares, at about US$2.29 per share. That means that an insider was happy to buy shares at above the current price of US$2.11. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Applied Blockchain insiders were buying shares, but not selling. They paid about US$2.71 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

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Insiders At Applied Blockchain Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Applied Blockchain. Insiders bought US$28k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership Of Applied Blockchain

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. Insiders own 11% of Applied Blockchain shares, worth about US$23m. 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 Applied Blockchain Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Applied Blockchain insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Applied Blockchain. While conducting our analysis, we found that Applied Blockchain has 3 warning signs and it would be unwise to ignore these.

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.

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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.