Those following along with IonQ, Inc. (NYSE:IONQ) will no doubt be intrigued by the recent purchase of shares by Harry You, Independent Director of the company, who spent a stonking US$1.1m on stock at an average price of US$9.28. While that only increased their holding size by 4.4%, it is still a big swing by our standards.
The Last 12 Months Of Insider Transactions At IonQ
The Co-Founder & Chief Scientist, Christopher Monroe, made the biggest insider sale in the last 12 months. That single transaction was for US$2.2m worth of shares at a price of US$10.75 each. That means that an insider was selling shares at below the current price (US$10.81). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 5.1% of Christopher Monroe's holding.
Over the last year we saw more insider selling of IonQ shares, than buying. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of IonQ
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. IonQ insiders own 9.1% of the company, currently worth about US$204m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The IonQ Insider Transactions Indicate?
The stark truth for IonQ is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. Every company has risks, and we've spotted 3 warning signs for IonQ you should know about.
But note: IonQ 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.