With LegalZoom.com, Inc.'s (NASDAQ:LZ)) price down 7.1% this week, insiders might find some solace having sold US$3.3m worth of shares earlier this year.

Over the past year, insiders sold US$3.3m worth of LegalZoom.com, Inc. (NASDAQ:LZ) stock at an average price of US$9.52 per share allowing them to get the most out of their money. The company's market worth decreased by US$133m over the past week after the stock price dropped 7.1%, although insiders were able to minimize their losses

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for LegalZoom.com

LegalZoom.com Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Director, Daniel Wernikoff, for US$377k worth of shares, at about US$8.62 per share. That means that even when the share price was below the current price of US$9.38, 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 43% of Daniel Wernikoff's holding.

Insiders in LegalZoom.com 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like LegalZoom.com better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

LegalZoom.com Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at LegalZoom.com. Specifically, insiders ditched US$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does LegalZoom.com Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. LegalZoom.com insiders own about US$66m worth of shares. That equates to 3.7% of the company. 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 Does This Data Suggest About LegalZoom.com Insiders?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing LegalZoom.com. In terms of investment risks, we've identified 1 warning sign with LegalZoom.com and understanding it should be part of your investment process.

But note: LegalZoom.com 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.