Are Insiders Buying ClearOne, Inc. (NASDAQ:CLRO) Stock?

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in ClearOne, Inc. (NASDAQ:CLRO).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for ClearOne

ClearOne Insider Transactions Over The Last Year

The insider Edward Bagley made the biggest insider purchase in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$2.49 each. That means that even when the share price was higher than US$2.41 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Over the last year, we can see that insiders have bought 1.08m shares worth US$2.6m. But they sold 9.93k shares for US$23k. In total, ClearOne insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders at ClearOne Have Bought Stock Recently

There has been significantly more insider buying, than selling, at ClearOne, over the last three months. Insiders spent US$210k on shares. But we did see Senior VP of Finance & Corporate Secretary Narsi Narayanan sell shares worth US$23k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Insider Ownership of ClearOne

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. ClearOne insiders own about US$25m worth of shares (which is 56% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About ClearOne Insiders?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about ClearOne. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ClearOne. Case in point: We've spotted 4 warning signs for ClearOne you should be aware of, and 1 of these is potentially serious.

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. 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.
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