Insiders probably made the right decision selling US$1.7m worth of shares earlier this year as Take-Two Interactive Software, Inc.'s (NASDAQ:TTWO)) stock dips by 6.9%.

Insiders at Take-Two Interactive Software, Inc. (NASDAQ:TTWO) sold US$1.7m worth of stock at an average price of US$151 a share over the past year, making the most of their investment. The company’s market cap plunged by US$1.5b after price dropped by 6.9% last week but insiders were able to limit their loss to an extent.

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.

Check out our latest analysis for Take-Two Interactive Software

Take-Two Interactive Software Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Legal Officer, Daniel Emerson, sold US$837k worth of shares at a price of US$189 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$119. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Daniel Emerson.

Daniel Emerson divested 10.99k shares over the last 12 months at an average price of US$151. 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 Take-Two Interactive Software better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Take-Two Interactive Software Have Sold Stock Recently

The last quarter saw substantial insider selling of Take-Two Interactive Software shares. Specifically, Executive VP & Chief Legal Officer Daniel Emerson ditched US$819k 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.

Insider Ownership Of Take-Two Interactive Software

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.4% of Take-Two Interactive Software shares, worth about US$72m. 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 Take-Two Interactive Software Insiders?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Take-Two Interactive Software has 4 warning signs we think you should be aware of.

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.

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.