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Investors who take an interest in SmartRent, Inc. (NYSE:SMRT) should definitely note that the Independent Chairman & Lead Independent Director, John Dorman, recently paid US$1.20 per share to buy US$150k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 119%.
View our latest analysis for SmartRent
The Last 12 Months Of Insider Transactions At SmartRent
In fact, the recent purchase by John Dorman was the biggest purchase of SmartRent shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$1.16 (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. 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. Their average price was about US$1.46. This is nice to see since it implies that insiders might see value around current prices. 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!
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).
Does SmartRent 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. It appears that SmartRent insiders own 9.6% of the company, worth about US$21m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The SmartRent Insider Transactions Indicate?
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. Given that insiders also own a fair bit of SmartRent we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing SmartRent. You'd be interested to know, that we found 1 warning sign for SmartRent and we suggest you have a look.