Quartz Mountain Resources Insiders Selling CA$1.8m In Stock Relieved As Market Cap Slides To CA$41m

Insiders at Quartz Mountain Resources Ltd. (CVE:QZM) sold CA$1.8m worth of stock at an average price of CA$0.20 a share over the past year, making the most of their investment. The company's market worth decreased by CA$7.1m over the past week after the stock price dropped 17%, although insiders were able to minimize their losses

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Quartz Mountain Resources

Quartz Mountain Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chairman, Robert Dickinson, for CA$1.8m worth of shares, at about CA$0.20 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$0.60. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 31% of Robert Dickinson's holding. The only individual insider seller over the last year was Robert Dickinson. Notably Robert Dickinson was also the biggest buyer, having purchased CA$1.2m worth of shares.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Quartz Mountain Resources insiders own 44% of the company, currently worth about CA$18m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Quartz Mountain Resources Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Quartz Mountain Resources insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Quartz Mountain Resources. When we did our research, we found 5 warning signs for Quartz Mountain Resources (3 don't sit too well with us!) that we believe deserve your full attention.

Of course Quartz Mountain Resources 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.