Despite a 12% gain in Fair Isaac Corporation's (NYSE:FICO) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell US$83m worth of stock in the past 12 months. This could be a sign of impending weakness.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Fair Isaac

Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Human Resources Officer, Richard Deal, for US$19m worth of shares, at about US$1,390 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$2,348. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 22% of Richard Deal's holding.

Fair Isaac insiders didn't buy any shares over the last year. 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!

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Does Fair Isaac Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Fair Isaac insiders own 2.6% of the company, currently worth about US$1.5b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Fair Isaac Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Fair Isaac shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Fair Isaac insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Fair Isaac. At Simply Wall St, we found 1 warning sign for Fair Isaac that deserve your attention before buying any shares.

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.