Rekor Systems' Market Cap Drops To US$93m Leaving Insiders With Losses

Insiders who bought US$1.20m worth of Rekor Systems, Inc.'s (NASDAQ:REKR) stock at an average buy price of US$1.40 over the last year may be disappointed by the recent 13% decrease in the stock. 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$900.4k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Rekor Systems

The Last 12 Months Of Insider Transactions At Rekor Systems

Over the last year, we can see that the biggest insider purchase was by Founder & Executive Chairman Robert Berman for US$980k worth of shares, at about US$1.40 per share. That means that even when the share price was higher than US$1.05 (the recent price), an insider wanted to purchase shares. 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. 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.

While Rekor Systems insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Are Rekor Systems Insiders Buying Or Selling?

There was some insider buying at Rekor Systems over the last quarter. President David Desharnais shelled out US$10.0k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Rekor Systems Boast High 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. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own US$4.4m worth of Rekor Systems stock, about 4.7% of the company. We consider this fairly low insider ownership.

What Might The Insider Transactions At Rekor Systems Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Rekor Systems insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 4 warning signs for Rekor Systems you should be aware of, and 1 of these is a bit unpleasant.

Of course Rekor 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.