Quantum Insiders Forfeit On 25% Gains After Selling Stock

Although Quantum Corporation (NASDAQ:QMCO) shareholders have enjoyed a great week with the stock up 25%, insiders who sold stock over the past year haven't fared as well. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Quantum

The Last 12 Months Of Insider Transactions At Quantum

The Chairman, James Lerner, made the biggest insider sale in the last 12 months. That single transaction was for US$170k worth of shares at a price of US$1.07 each. 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 US$0.48. So it may not tell us anything about how insiders feel about the current share price.

Insiders in Quantum didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Quantum better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Quantum Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 5.7% of Quantum shares, worth about US$2.6m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Quantum Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Quantum are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Quantum. To help with this, we've discovered 4 warning signs (2 make us uncomfortable!) that you ought to be aware of before buying any shares in Quantum.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.