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Insiders at Open Text Corporation (NASDAQ:OTEX) sold US$7.9m worth of stock at an average price of US$53.22 a share over the past year, making the most of their investment. The company's market valuation decreased by US$423m after the stock price dropped 4.0% over the past week, but insiders were spared from painful losses.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Open Text

The Vice Chairman, Mark Barrenechea, made the biggest insider sale in the last 12 months. That single transaction was for US$5.7m worth of shares at a price of US$54.89 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$38.23). So it may not tell us anything about how insiders feel about the current share price.

In total, Open Text insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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.

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Open Text insiders own about US$169m worth of shares (which is 1.7% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

It doesn't really mean much that no insider has traded Open Text shares in the last quarter. While we feel good about high insider ownership of Open Text, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Open Text. You'd be interested to know, that we found 2 warning signs for Open Text and we suggest you have a look.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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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.

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Open Text Corporation (NASDAQ:OTEX) insiders who sold US$7.9m worth of stock earlier this year are probably glad they did so as market cap slides to...