Insider Buying: The SmartRent, Inc. (NYSE:SMRT) Independent Director Just Bought 50% More Shares

By
Simply Wall St
Published
November 16, 2021
NYSE:SMRT
Source: Shutterstock

Investors who take an interest in SmartRent, Inc. (NYSE:SMRT) should definitely note that the Independent Director, Bruce Strohm, recently paid US$11.00 per share to buy US$110k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 50%.

Check out our latest analysis for SmartRent

The Last 12 Months Of Insider Transactions At SmartRent

Notably, that recent purchase by Independent Director Bruce Strohm was not the only time they bought SmartRent shares this year. Earlier in the year, they paid US$12.93 per share in a US$127k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$10.90). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Bruce Strohm was the only individual insider to buy during the last year.

Bruce Strohm bought a total of 30.00k shares over the year at an average price of US$11.97. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:SMRT Insider Trading Volume November 17th 2021

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

Does SmartRent Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. SmartRent insiders own about US$173m worth of shares (which is 8.2% 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 SmartRent Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about SmartRent. Nice! 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 3 warning signs for SmartRent you should be aware of.

But note: SmartRent may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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