Insiders Made Right Decision To Sell As TMC the metals Dips 11%

By selling US$716k worth of TMC the metals company Inc. (NASDAQ:TMC) stock at an average sell price of US$1.21 over the last year, insiders seemed to have made the most of their holdings. The company's market valuation decreased by US$72m after the stock price dropped 11% over the past week, but insiders were spared from painful losses.

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.

TMC the metals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Strategy Officer, Erika Ilves, for US$241k worth of shares, at about US$1.11 per share. That means that an insider was selling shares at slightly below the current price (US$1.66). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 64% of Erika Ilves's holding.

In total, TMC the metals insiders sold more than they bought over the last year. 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!

See our latest analysis for TMC the metals

I will like TMC the metals better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At TMC the metals Have Sold Stock Recently

The last quarter saw substantial insider selling of TMC the metals shares. In total, insiders sold US$256k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does TMC the metals Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. TMC the metals insiders own about US$44m worth of shares. That equates to 7.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The TMC the metals Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, TMC the metals has 4 warning signs (and 2 which are significant) we think you should know about.

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.