We'd be surprised if Energy Recovery, Inc. (NASDAQ:ERII) shareholders haven't noticed that the Independent Director, Arve Hanstveit, recently sold US$445k worth of stock at US$14.84 per share. On the bright side, that sale was only 3.9% of their holding, so we doubt it's very meaningful, on its own.

Energy Recovery Insider Transactions Over The Last Year

In fact, the recent sale by Independent Director Arve Hanstveit was not their only sale of Energy Recovery shares this year. Earlier in the year, they fetched US$16.34 per share in a -US$817k sale. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$14.41. So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 8.40k shares worth US$103k. But insiders sold 130.00k shares worth US$1.9m. Arve Hanstveit ditched 130.00k shares over the year. The average price per share was US$14.60. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 2.0% of Energy Recovery shares, worth about US$15m. 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 Energy Recovery Tell Us?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Energy Recovery is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Energy Recovery.

But note: Energy Recovery may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.