While it’s been a great week for Ainos, Inc. (NASDAQ:AIMD) shareholders after stock gained 13%, not so much for insiders who sold stock over the past year. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Ainos

In the last twelve months, the biggest single sale by an insider was when the Director, Ting-Chuan Lee, sold US$209k worth of shares at a price of US$1.90 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$2.04. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 12% of Ting-Chuan Lee's holding.

In total, Ainos insiders sold more than they bought over the last year. 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!

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Insiders At Ainos Have Sold Stock Recently

There was substantially more insider selling, than buying, of Ainos shares over the last three months. We note insiders cashed in US$291k worth of shares. On the other hand we note Independent Director Yao-Chung Chiang bought US$21k worth of shares , as previously mentioned . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership Of Ainos

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Ainos insiders own about US$4.6m worth of shares. That equates to 32% of the company. 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 Ainos Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Ainos stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Ainos is showing 7 warning signs in our investment analysis, and 5 of those are a bit unpleasant...

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.

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.