Nouveau Monde Graphite Insider Sellers Miss The Bus As Stock Jumps 11%

Even though Nouveau Monde Graphite Inc. (TSE:NOU) stock gained 11% last week, insiders who sold CA$116k worth of stock over the past year are probably better off. Selling at an average price of CA$2.78, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Nouveau Monde Graphite

Over the last year, we can see that the biggest insider sale was by the Founder, Eric Desaulniers, for CA$98k worth of shares, at about CA$2.80 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of CA$2.36. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Eric Desaulniers.

Eric Desaulniers sold a total of 41.90k shares over the year at an average price of CA$2.78. 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!

Check out our latest analysis for Nouveau Monde Graphite

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 Of Nouveau Monde Graphite

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Nouveau Monde Graphite insiders own 0.7% of the company, worth about CA$2.4m. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.

So What Do The Nouveau Monde Graphite Insider Transactions Indicate?

The fact that there have been no Nouveau Monde Graphite insider transactions recently certainly doesn't bother us. The insider transactions at Nouveau Monde Graphite are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Nouveau Monde Graphite. In terms of investment risks, we've identified 3 warning signs with Nouveau Monde Graphite and understanding them should be part of your investment process.

Of course Nouveau Monde Graphite 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.