Even though QuantumScape Corporation (NYSE:QS) has fallen by 10% over the past week , insiders who sold US$2.5m worth of stock over the past year have had less luck. The average selling price of US$6.31 is still lower than the current share price, or in other words, insiders would have been better off holding on to 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.

The Last 12 Months Of Insider Transactions At QuantumScape

The Chief Legal Officer & Head of Corporate Development, Michael McCarthy, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$6.58 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$5.12. So it may not shed much light on insider confidence at current levels.

In the last year QuantumScape insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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QuantumScape Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at QuantumScape. In total, Chief Legal Officer & Head of Corporate Development Michael McCarthy dumped US$336k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

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. It's great to see that QuantumScape insiders own 8.8% of the company, worth about US$231m. 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 QuantumScape Insider Transactions Indicate?

An insider hasn't bought QuantumScape stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. Be aware that QuantumScape is showing 5 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

Of course QuantumScape 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.