Reversal Of Fortune For SmartRent Insiders Who Made A US$644.8k Purchase

Insiders who bought US$644.8k worth of SmartRent, Inc. (NYSE:SMRT) stock in the last year recovered part of their losses as the stock rose by 21% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$143k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At SmartRent

Over the last year, we can see that the biggest insider purchase was by Chairman of the Board John Dorman for US$150k worth of shares, at about US$1.20 per share. That means that an insider was happy to buy shares at above the current price of US$1.11. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months SmartRent insiders were buying shares, but not selling. The average buy price was around US$1.43. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for SmartRent

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. SmartRent insiders own about US$14m worth of shares. That equates to 7.1% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At SmartRent Tell Us?

It doesn't really mean much that no insider has traded SmartRent shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in SmartRent and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing SmartRent. Case in point: We've spotted 2 warning signs for SmartRent you should be aware of.

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.