We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in QinetiQ Group plc (LON:QQ.).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
QinetiQ Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when CEO & Executive Director Steve Wadey sold UK£398k worth of shares at a price of UK£2.68 per share. That means that even when the share price was below the current price of UK£2.97, an insider wanted to cash in some shares. While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 35.5% of Steve Wadey’s stake. The only individual insider seller over the last year was Steve Wadey.
Happily, we note that in the last year insiders paid UK£20k for 10.22k shares. But they sold 148.50k for UK£398k. You can see the insider transactions (by 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 alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Many investors like to check how much of a company is owned by 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 suggests QinetiQ Group insiders own 0.1% of the company, worth about UK£2.0m. We consider this fairly low insider ownership.
What Might The Insider Transactions At QinetiQ Group Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. The insider transactions at QinetiQ Group 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. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.