Applied Optoelectronics Independent Director Acquires 18% More Stock

Investors who take an interest in Applied Optoelectronics, Inc. (NASDAQ:AAOI) should definitely note that the Independent Director, Che-Wei Lin, recently paid US$12.70 per share to buy US$398k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 18%.

See our latest analysis for Applied Optoelectronics

Applied Optoelectronics Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CFO & Chief Strategy Officer, Stefan Murry, sold US$709k worth of shares at a price of US$11.82 per share. That means that even when the share price was below the current price of US$13.60, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 69% of Stefan Murry's holding.

Over the last year, we can see that insiders have bought 117.92k shares worth US$1.5m. But insiders sold 200.52k shares worth US$2.5m. Over the last year we saw more insider selling of Applied Optoelectronics shares, than buying. 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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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Applied Optoelectronics insiders own 4.4% of the company, worth about US$23m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Applied Optoelectronics Insiders?

The recent insider purchases are heartening. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Applied Optoelectronics, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for Applied Optoelectronics and we suggest you have a look.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.