Over the past year, many Genpact Limited (NYSE:G) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Genpact Insider Transactions Over The Last Year

The Chief Human Resources Officer & Senior VP, Piyush Mehta, made the biggest insider sale in the last 12 months. That single transaction was for US$2.6m worth of shares at a price of US$37.18 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$31.64). So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$277k for 7.50k shares. But they sold 124.80k shares for US$4.6m. Over the last year we saw more insider selling of Genpact shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Genpact Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Genpact. In total, Chief Accounting Officer Donald Klunk sold US$67k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Genpact

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.7% of Genpact shares, worth about US$42m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Genpact Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Genpact is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Genpact is showing 2 warning signs in our investment analysis, and 1 of those is a bit concerning...

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 of direct interests only, but not derivative transactions or indirect interests.

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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.