TORM Insiders Sell US$60m Of Stock, Possibly Signalling Caution

Many TORM plc (CPH:TRMD A) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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TORM Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, Jacob Meldgaard, for kr.58m worth of shares, at about kr.224 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is kr.108. So it may not tell us anything about how insiders feel about the current share price.

In the last year TORM 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for TORM

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).

Insiders At TORM Have Sold Stock Recently

We have seen a bit of insider selling at TORM, over the last three months. Non-Executive Independent Director Annette Beate Wacknitz Justad divested only kr.308k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

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. Our data suggests TORM insiders own 0.1% of the company, worth about kr.15m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At TORM Tell Us?

An insider hasn't bought TORM 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. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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. Our analysis shows 3 warning signs for TORM (1 is potentially serious!) and we strongly recommend you look at these before investing.

Of course TORM 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.