The Independent Director of Applied Optoelectronics, Inc. (NASDAQ:AAOI), Che-Wei Lin, Just Bought 42% More Shares

Potential Applied Optoelectronics, Inc. (NASDAQ:AAOI) shareholders may wish to note that the Independent Director, Che-Wei Lin, recently bought US$199k worth of stock, paying US$7.82 for each share. That's a very solid buy in our book, and increased their holding by a noteworthy 42%.

Check out our latest analysis for Applied Optoelectronics

Applied Optoelectronics Insider Transactions Over The Last Year

Notably, that recent purchase by Che-Wei Lin is the biggest insider purchase of Applied Optoelectronics shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of US$8.32. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Over the last year, we can see that insiders have bought 35.40k shares worth US$289k. But they sold 12.50k shares for US$176k. Overall, Applied Optoelectronics insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Applied Optoelectronics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Applied Optoelectronics Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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 5.3% of the company, worth about US$10m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Applied Optoelectronics Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Applied Optoelectronics insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Applied Optoelectronics (of which 1 shouldn't be ignored!) you should know about.

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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