Selling Nouveau Monde Graphite Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders
Nouveau Monde Graphite Inc.'s (TSE:NOU) stock price has dropped 16% in the previous week, but insiders who sold CA$777k in stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of CA$3.61 is still below the current share price.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Nouveau Monde Graphite Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Andrew Willis, for CA$777k worth of shares, at about CA$3.62 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of CA$1.67. So it is hard to draw any strong conclusion from it. Andrew Willis was the only individual insider to sell shares in the last twelve months.
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!
View our latest analysis for Nouveau Monde Graphite
I will like Nouveau Monde Graphite better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of Nouveau Monde Graphite
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Nouveau Monde Graphite insiders own 0.3% of the company, worth about CA$1.6m. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Nouveau Monde Graphite Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Nouveau Monde Graphite 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. While it's good to be aware of 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. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Nouveau Monde Graphite.
Of course Nouveau Monde Graphite 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.