Independent Director Andrew McKnight Sold A Bunch Of Shares In MP Materials

We wouldn't blame MP Materials Corp. (NYSE:MP) shareholders if they were a little worried about the fact that Andrew McKnight, the Independent Director recently netted about US$5.7m selling shares at an average price of US$18.07. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.

Check out our latest analysis for MP Materials

The Last 12 Months Of Insider Transactions At MP Materials

In fact, the recent sale by Andrew McKnight was the biggest sale of MP Materials shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of US$18.02. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. 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).

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

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. MP Materials insiders own about US$372m worth of shares (which is 12% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At MP Materials Tell Us?

An insider hasn't bought MP Materials stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing 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. At Simply Wall St, we've found that MP Materials has 3 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.