Investors who take an interest in SmartRent, Inc. (NYSE:SMRT) should definitely note that the CEO, President & Director, Frank Martell, recently paid US$1.32 per share to buy US$305k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 51%, potentially signalling some real optimism.
SmartRent Insider Transactions Over The Last Year
Notably, that recent purchase by Frank Martell is the biggest insider purchase of SmartRent shares that we've seen in the last year. That means that even when the share price was higher than US$1.36 (the recent price), an insider wanted to purchase shares. 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 insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
SmartRent insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for SmartRent
SmartRent is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does SmartRent Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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$24m worth of shares. That equates to 9.3% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The SmartRent Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in SmartRent shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of SmartRent.
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.