Last week, QuinStreet, Inc.'s (NASDAQ:QNST) stock jumped 17%, but insiders who sold US$425k worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$12.87, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At QuinStreet
The Chief Financial Officer, Gregory Wong, made the biggest insider sale in the last 12 months. That single transaction was for US$425k worth of shares at a price of US$12.94 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$15.09. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 19% of Gregory Wong's holding. Gregory Wong was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 42.77k shares for US$345k. But they sold 33.01k shares for US$425k. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At QuinStreet Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at QuinStreet. Specifically, Chief Financial Officer Gregory Wong ditched US$425k 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.
Does QuinStreet 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 4.7% of QuinStreet shares, worth about US$39m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At QuinStreet Tell Us?
An insider hasn't bought QuinStreet stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. While conducting our analysis, we found that QuinStreet has 2 warning signs and it would be unwise to ignore them.
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.