Insider Traders Lose CA$128k As Quebec Rare Earth Elements Drops

The recent 19% drop in Quebec Rare Earth Elements Corp.'s (CSE:QREE) stock could come as a blow to insiders who purchased CA$493.2k worth of stock at an average buy price of CA$0.11 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$365.6k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Quebec Rare Earth Elements

Quebec Rare Earth Elements Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Founder & Independent Non-Executive Chairman John Jentz bought CA$124k worth of shares at a price of CA$0.07 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.085. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Quebec Rare Earth Elements insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around CA$0.11. These transactions suggest that insiders have considered the current price attractive. 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!

Quebec Rare Earth Elements 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.

Quebec Rare Earth Elements Insiders Bought Stock Recently

There was some insider buying at Quebec Rare Earth Elements over the last quarter. Founder & Independent Non-Executive Chairman John Jentz bought CA$34k worth of shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Quebec Rare Earth Elements insiders own 63% of the company, currently worth about CA$2.7m 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.

So What Do The Quebec Rare Earth Elements Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Quebec Rare Earth Elements insiders think the business has merit. 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. When we did our research, we found 3 warning signs for Quebec Rare Earth Elements (2 are potentially serious!) that we believe deserve your full attention.

Of course Quebec Rare Earth Elements 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.

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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.