Despite a 15% gain in ClearOne, Inc.'s (NASDAQ:CLRO) stock price this week, shareholders shouldn't let up. The fact that insiders chose to dispose of US$2.1m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At ClearOne

The insider, Edward Bagley, made the biggest insider sale in the last 12 months. That single transaction was for US$2.1m worth of shares at a price of US$3.00 each. That means that even when the share price was below the current price of US$3.60, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 83% of Edward Bagley's holding. Edward Bagley was the only individual insider to sell over the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like ClearOne better if I see some big insider buys.

Insider Ownership Of ClearOne

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that ClearOne insiders own about US$475k worth of shares (which is 5.3% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About ClearOne Insiders?

The fact that there have been no ClearOne insider transactions recently certainly doesn't bother us. The insider transactions at ClearOne are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision.

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.