Insiders who sold Persistent Systems Limited's (NSE:PERSISTENT) earlier year may find some solace in the 11% drop

Persistent Systems Limited's (NSE:PERSISTENT) stock price has dropped 11% in the previous week, but insiders who sold ₹208m in stock over the past year have had less luck. Given that the average selling price of ₹2,768 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Persistent Systems

Persistent Systems Insider Transactions Over The Last Year

The CEO, President & Executive Director, Sandeep Kalra, made the biggest insider sale in the last 12 months. That single transaction was for ₹64m worth of shares at a price of ₹3,197 each. That means that even when the share price was below the current price of ₹3,594, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 18% of Sandeep Kalra's holding.

Insiders in Persistent Systems didn't buy any shares in 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Persistent Systems Boast High Insider Ownership?

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. Persistent Systems insiders own about ₹95b worth of shares (which is 35% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Persistent Systems Tell Us?

The fact that there have been no Persistent Systems insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Persistent Systems insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Persistent Systems you should be aware of.

But note: Persistent Systems 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.