Insiders Could Have Profited By Holding onto ClearOne Shares Despite 12% Drop

Even though ClearOne, Inc. (NASDAQ:CLRO) has fallen by 12% over the past week , insiders who sold US$550k worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$2.14 is still lower than the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for ClearOne

ClearOne Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Bryan Bagley, sold US$550k worth of shares at a price of US$2.18 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$0.49. So it may not shed much light on insider confidence at current levels. Bryan Bagley was the only individual insider to sell over the last year.

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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does ClearOne Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. ClearOne insiders own about US$5.4m worth of shares (which is 44% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The ClearOne Insider Transactions Indicate?

It doesn't really mean much that no insider has traded ClearOne shares in the last quarter. While we feel good about high insider ownership of ClearOne, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ClearOne. Our analysis shows 2 warning signs for ClearOne (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.

Of course ClearOne 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.