Arqit Quantum's Stock Sinks To US$15.90, But Insiders Sold Even Lower

Despite the fact that Arqit Quantum Inc.'s (NASDAQ:ARQQ) value has dropped 14% in the last week insiders who sold US$439k worth of stock in the past 12 months have had less success. Given that the average selling price of US$20.43 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

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The Last 12 Months Of Insider Transactions At Arqit Quantum

In the last twelve months, the biggest single purchase by an insider was when Independent Vice Chairman & Senior Independent Director Manfredi D'ovidio De Clunieres Di Balsorano bought US$14m worth of shares at a price of US$48.09 per share. That means that even when the share price was higher than US$15.90 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Manfredi D'ovidio De Clunieres Di Balsorano was the only individual insider to buy shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Arqit Quantum

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Arqit Quantum Have Sold Stock Recently

The last three months saw significant insider selling at Arqit Quantum. In total, insiders sold US$218k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

Many investors like to check how much of a company is owned by 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. It's great to see that Arqit Quantum insiders own 59% of the company, worth about US$150m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Arqit Quantum Insiders?

Insiders sold Arqit Quantum shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. On top of that, insiders own a significant portion of the company. So the recent selling doesn't worry us. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Arqit Quantum. Every company has risks, and we've spotted 4 warning signs for Arqit Quantum (of which 2 are a bit unpleasant!) you should know about.

But note: Arqit Quantum may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.