Read This Before Selling QinetiQ Group plc (LON:QQ.) Shares

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in QinetiQ Group plc (LON:QQ.).

What Is Insider Selling?

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. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for QinetiQ Group

The Last 12 Months Of Insider Transactions At QinetiQ Group

Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, Steve Wadey, for UK£58k worth of shares, at about UK£3.15 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£3.26. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 4.7% of Steve Wadey's holding. Steve Wadey was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 24.01k shares for UK£65k. On the other hand they divested 18.48k shares, for UK£58k. Overall, QinetiQ Group insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

QinetiQ Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at QinetiQ Group Have Bought Stock Recently

We saw some QinetiQ Group insider buying shares in the last three months. Independent Non-Executive Director Susan Jane Searle bought UK£26k worth of shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Insider Ownership of QinetiQ Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own UK£3.0m worth of QinetiQ Group stock, about 0.2% of the company. We prefer to see high levels of insider ownership.

So What Do The QinetiQ Group Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if QinetiQ Group insiders bought more shares in the company. While we like knowing 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. For example - QinetiQ Group has 2 warning signs we think you should be aware of.

Of course QinetiQ Group 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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