Insiders In Nouveau Monde Graphite Left Out From 13% Price Rise After Disposing Stock

Even though Nouveau Monde Graphite Inc. (CVE:NOU) stock gained 13% 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 wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Nouveau Monde Graphite

Nouveau Monde Graphite Insider Transactions Over The Last Year

The Founder, Eric Desaulniers, made the biggest insider sale in the last 12 months. That single transaction was for CA$98k worth of shares at a price of CA$2.80 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$2.12. So it may not shed much light on insider confidence at current levels. Eric Desaulniers was the only individual insider to sell over the last year.

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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Nouveau Monde Graphite Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Nouveau Monde Graphite shares. Specifically, Founder Eric Desaulniers ditched CA$116k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own CA$2.0m worth of Nouveau Monde Graphite stock, about 0.9% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

What Might The Insider Transactions At Nouveau Monde Graphite Tell Us?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we're not rushing to buy, to say the least. 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. To help with this, we've discovered 4 warning signs (3 don't sit too well with us!) that you ought to be aware of before buying any shares in Nouveau Monde Graphite.

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.