Desktop Metal, Inc. (NYSE:DM) insiders who sold US$4.8m worth of stock earlier this year are probably glad they did so as market cap slides to US$1.5b

Over the past year, insiders sold US$4.8m worth of Desktop Metal, Inc. (NYSE:DM) stock at an average price of US$19.35 per share allowing them to get the most out of their money. The company's market worth decreased by US$124m over the past week after the stock price dropped 7.6%, 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, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Desktop Metal

Desktop Metal Insider Transactions Over The Last Year

The Director, Leo Hindery, made the biggest insider sale in the last 12 months. That single transaction was for US$4.8m worth of shares at a price of US$19.35 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$4.85. So it is hard to draw any strong conclusion from it. Leo Hindery was the only individual insider to sell shares in the last twelve months.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Desktop Metal Boast High Insider Ownership?

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. Desktop Metal insiders own 14% of the company, currently worth about US$209m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Desktop Metal Tell Us?

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 Desktop Metal, 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 Desktop Metal. Case in point: We've spotted 3 warning signs for Desktop Metal you should be aware of.

But note: Desktop Metal 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.