Insiders who bought Alliance Entertainment Holding Corporation (NASDAQ:AENT) stock lover the last 12 months are probably not as affected by last week’s 13% loss. After taking the recent loss into consideration, the US$324.2k worth of stock they bought is now worth US$511.5k, indicating that their investment yielded a positive return.

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 Alliance Entertainment Holding

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Jeffrey Walker bought US$269k worth of shares at a price of US$3.93 per share. We do like to see buying, but this purchase was made at well below the current price of US$5.97. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Alliance Entertainment Holding insiders were buying shares, but not selling. 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!

Alliance Entertainment Holding is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Alliance Entertainment Holding

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. Alliance Entertainment Holding insiders own 94% of the company, currently worth about US$305m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Alliance Entertainment Holding Tell Us?

It doesn't really mean much that no insider has traded Alliance Entertainment Holding shares in the last quarter. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Alliance Entertainment Holding insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Alliance Entertainment Holding has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

Of course Alliance Entertainment Holding may not be the best stock to buy. So you may wish to see this free collection of high quality 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.