The Toronto-Dominion Bank's (TSE:TD)) market cap declines to CA$146b but insiders who sold CA$5.9m stock were able to hedge their losses

Insiders at The Toronto-Dominion Bank (TSE:TD) sold CA$5.9m worth of stock at an average price of CA$85.06 a share over the past year, making the most of their investment. The company’s market cap plunged by CA$4.9b after price dropped by 3.2% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Toronto-Dominion Bank

Toronto-Dominion Bank Insider Transactions Over The Last Year

The insider, Robert Dorrance, made the biggest insider sale in the last 12 months. That single transaction was for CA$5.9m worth of shares at a price of CA$85.16 each. That means that an insider was selling shares at around the current price of CA$80.00. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). The only individual insider seller over the last year was Robert Dorrance.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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. 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's great to see that Toronto-Dominion Bank insiders own 0.1% of the company, worth about CA$212m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Toronto-Dominion Bank Insiders?

The fact that there have been no Toronto-Dominion Bank insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Toronto-Dominion Bank insiders selling. 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. Case in point: We've spotted 1 warning sign for Toronto-Dominion Bank you should be aware of.

But note: Toronto-Dominion Bank 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, but not derivative transactions.

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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.