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Possible Bearish Signals With Tronox Holdings Insiders Disposing Stock

Simply Wall St ·  Oct 26, 2023 12:27

In the last year, many Tronox Holdings plc (NYSE:TROX) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. 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.

Check out our latest analysis for Tronox Holdings

Tronox Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Co-CEO & Director, Jean-Francois Turgeon, for US$1.5m worth of shares, at about US$15.51 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 US$10.43. So it may not shed much light on insider confidence at current levels.

In the last twelve months insiders purchased 9.00k shares for US$107k. But insiders sold 320.26k shares worth US$5.0m. In total, Tronox Holdings insiders sold more than they bought over the last year. 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!

insider-trading-volume
NYSE:TROX Insider Trading Volume October 26th 2023

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).

Insiders At Tronox Holdings Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Tronox Holdings. Independent Director Vanessa Guthrie sold just US$33k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Insider Ownership Of Tronox Holdings

Many investors like to check how much of a company is owned by 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. Insiders own 1.6% of Tronox Holdings shares, worth about US$27m. 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 Tronox Holdings Insider Transactions Indicate?

Our data shows a little more insider selling, but no insider buying, in the last three months. But given the selling was modest, we're not worried. Recent sales exacerbate our caution arising from analysis of Tronox Holdings insider transactions. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tronox Holdings. While conducting our analysis, we found that Tronox Holdings has 2 warning signs and it would be unwise to ignore these.

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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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