The most common and most likely answer to this crossword clue is the 5 letter word KNOWS
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More clues leading to the result KNOWS
Buddy explains!

The straight part
We know that "Understands" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case understands = knows.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does KNOWS mean?
KNOWS noun- Knowledge; the state of knowing.
- To perceive the truth or factuality of; to be certain of or that.
- To be aware of; to be cognizant of.
- To be acquainted or familiar with; to have encountered.
- To experience.
- To be able to distinguish, to discern, particularly by contrast or comparison; to recognize the nature of.
- To recognize as the same (as someone or something previously encountered) after an absence or change.
- To understand or have a grasp of through experience or study.
- To have sexual relations with. This meaning normally specified in modern English as e.g. to ’know someone in the biblical sense’ or to ‘know Biblically.’
- To have knowledge; to have information, be informed.
- To be or become aware or cognizant.
- To be acquainted (with another person).
- To be able to play or perform (a song or other piece of music).