The InterGroup Corporation (NASDAQ:INTG) up 12%, but insiders miss out having sold stock earlier this year

While The InterGroup Corporation (NASDAQ:INTG) shareholders have had a good week with the stock up 12%, insiders can't say the same having sold stock over the past year. The return on their investment would have been much higher had they held on to their stock.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for InterGroup

The Last 12 Months Of Insider Transactions At InterGroup

In the last twelve months, the biggest single sale by an insider was when the Independent Director, John Love, sold US$72k worth of shares at a price of US$45.29 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$51.90. 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. This single sale was just 8.4% of John Love's stake. John Love was the only individual insider to sell shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

InterGroup Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at InterGroup. Specifically, Independent Director John Love ditched US$72k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does InterGroup Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. InterGroup insiders own about US$77m worth of shares (which is 68% 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 InterGroup Tell Us?

An insider hasn't bought InterGroup stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since InterGroup is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 instance, we've identified 4 warning signs for InterGroup (2 can't be ignored) you should be aware of.

Of course InterGroup may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.