Quantum-Si incorporated (NASDAQ:QSI) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 12% decline in the stock price. Even after accounting for the recent loss, the US$376.7k worth of stock purchased by them is now worth US$607.1k or in other words, their investment continues to give good returns.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Quantum-Si
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman Charles Kummeth bought US$148k worth of shares at a price of US$0.89 per share. We do like to see buying, but this purchase was made at well below the current price of US$1.71. 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.
Over the last year, we can see that insiders have bought 355.00k shares worth US$377k. But they sold 16.14k shares for US$19k. In total, Quantum-Si insiders bought more than they sold over the last year. Their average price was about US$1.06. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Quantum-Si is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
The last three months saw some Quantum-Si insider selling. Chief Product Officer John Vieceli sold just US$5.6k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 appears that Quantum-Si insiders own 19% of the company, worth about US$60m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we're not concerned. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Quantum-Si and we see no evidence to suggest they are worried about the future. 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. When we did our research, we found 4 warning signs for Quantum-Si (1 is concerning!) that we believe deserve your full attention.
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.
Discover if Quantum-Si might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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