Last week, Arqit Quantum Inc. (NASDAQ:ARQQ) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 18% last week, resulting in a US$407m increase in the company's market worth. In other words, the original UK£72m purchase is now worth UK£203m.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Arqit Quantum
The insider Manfredi D’Ovidio made the biggest insider purchase in the last 12 months. That single transaction was for US$50m worth of shares at a price of US$10.00 each. Even though the purchase was made at a significantly lower price than the recent price (US$22.50), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Manfredi D’Ovidio bought a total of 9.03m shares over the year at an average price of US$7.98. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Arqit Quantum Boast High 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. We usually like to see fairly high levels of insider ownership. It's great to see that Arqit Quantum insiders own 27% of the company, worth about US$720m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Arqit Quantum Tell Us?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Arqit Quantum. One for the watchlist, at least! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Arqit Quantum is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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.
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