CEO & Executive Director Jacob Meldgaard Sold A Bunch Of Shares In TORM

We wouldn't blame TORM plc (CPH:TRMD A) shareholders if they were a little worried about the fact that Jacob Meldgaard, the CEO & Executive Director recently netted about kr.58m selling shares at an average price of kr.223. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.

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TORM Insider Transactions Over The Last Year

In fact, the recent sale by CEO & Executive Director Jacob Meldgaard was not their only sale of TORM shares this year. They previously made an even bigger sale of -kr.108m worth of shares at a price of kr.215 per share. That means that an insider was selling shares at below the current price (kr.218). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 99% of Jacob Meldgaard's holding.

In the last year TORM insiders didn't buy any company stock. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of TORM

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that TORM insiders own about kr.65m worth of shares (which is 0.3% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About TORM Insiders?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. 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 TORM (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

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 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.