Tinybeans Group Limited (ASX:TNY) insiders who sold US$3.6m worth of stock earlier this year are probably glad they did so as market cap slides to AU$15m

By selling US$3.6m worth of Tinybeans Group Limited (ASX:TNY) stock at an average sell price of US$1.42 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by AU$2.7m over the past week after the stock price dropped 16%, although insiders were able to minimize their losses

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 Tinybeans Group

Tinybeans Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Stephen O'Young, sold AU$2.6m worth of shares at a price of AU$1.40 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (AU$0.24). So it may not shed much light on insider confidence at current levels.

Over the last year, we can see that insiders have bought 1.46m shares worth AU$321k. But they sold 2.57m shares for AU$3.6m. In total, Tinybeans Group insiders sold more than they bought over the last year. They sold for an average price of about US$1.42. Insider selling doesn't make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is AU$0.24). You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Tinybeans Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Tinybeans Group 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Tinybeans Group insiders own about AU$6.0m worth of shares (which is 40% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Tinybeans Group Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Tinybeans Group, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tinybeans Group. To that end, you should learn about the 4 warning signs we've spotted with Tinybeans Group (including 1 which is significant).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.