We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Q-Free ASA (OB:QFR), you may well want to know whether insiders have been buying or selling.
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
Q-Free Insider Transactions Over The Last Year
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
Over the last year, we can see that insiders have bought 49.60k shares worth øre399k. Overall, Q-Free insiders were net buyers last year. Their average price was about øre8.05. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (øre8.05). The chart below shows insider transactions (by 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!
I will like Q-Free better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 24% of Q-Free shares, worth about øre171m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Q-Free Insider Transactions Indicate?
The fact that there have been no Q-Free insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Q-Free insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. Along with insider transactions, I recommend checking if Q-Free is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Q-Free may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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