While Tronox Holdings plc (NYSE:TROX) shareholders have enjoyed a good week with stock up 12%, they need remain vigilant. In spite of the relatively cheap prices, insiders made the decision to sell US$5.0m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Tronox Holdings
Tronox Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Co-CEO & Director, Jean-Francois Turgeon, sold US$1.5m worth of shares at a price of 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$13.88. So it may not tell us anything about how insiders feel about the current share price.
In the last year Tronox Holdings insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Tronox Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Tronox Holdings insiders own 1.6% of the company, worth about US$33m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Tronox Holdings Tell Us?
The fact that there have been no Tronox Holdings insider transactions recently certainly doesn't bother us. Still, the insider transactions at Tronox Holdings in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. 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 - Tronox Holdings has 2 warning signs we think you should be aware of.
But note: Tronox Holdings 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 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.