As MongoDB, Inc.'s (NASDAQ:MDB)) market cap dropped by US$501m, insiders who sold US$14m worth of stock were able to offset their losses

Insiders at MongoDB, Inc. (NASDAQ:MDB) sold US$14m worth of stock at an average price of US$321 a share over the past year, making the most of their investment. After the stock price dropped 3.4% last week, the company's market value declined by US$501m, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for MongoDB

MongoDB Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President, Dev Ittycheria, sold US$5.4m worth of shares at a price of US$446 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$206). So it may not shed much light on insider confidence at current levels.

In the last year MongoDB 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. By clicking on the graph below, you can see the precise details of each insider transaction!

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

MongoDB Insiders Are Selling The Stock

The last quarter saw substantial insider selling of MongoDB shares. Specifically, insiders ditched US$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of MongoDB

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. MongoDB insiders own 3.8% of the company, currently worth about US$535m 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 MongoDB Tell Us?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. 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. In terms of investment risks, we've identified 4 warning signs with MongoDB and understanding these should be part of your investment process.

But note: MongoDB 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.