We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Prozone Intu Properties Limited (NSE:PROZONINTU), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

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Prozone Intu Properties Insider Transactions Over The Last Year

V. Chhabra made the biggest insider sale in the last 12 months. That single transaction was for ₹19m worth of shares at a price of ₹49.35 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of ₹30.35. So it may not tell us anything about how insiders feel about the current share price.

We note that in the last year insiders divested 847.23k shares for a total of ₹42m. In total, Prozone Intu Properties insiders sold more than they bought over the last year. The average sell price was around ₹49.76. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of ₹30.35. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Prozone Intu Properties Insiders Are Selling The Stock

Over the last three months, we’ve seen a bit of insider selling at Prozone Intu Properties. Akhil Chaturvedi divested only ₹2.6m worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn’t sufficiently substantial to be of much use as a signal.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Prozone Intu Properties insiders own about ₹1.6b worth of shares. That equates to 34% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Prozone Intu Properties Tell Us?

An insider hasn’t bought Prozone Intu Properties stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.