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Over the past year, many Monster Beverage Corporation (NASDAQ:MNST) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. 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 would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Monster Beverage
The Director, Mark Hall, made the biggest insider sale in the last 12 months. That single transaction was for US$13m worth of shares at a price of US$52.22 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$57.83. 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. 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 32% of Mark Hall's stake.
In the last twelve months insiders purchased 120.82k shares for US$6.4m. But insiders sold 651.81k shares worth US$34m. All up, insiders sold more shares in Monster Beverage than they bought, 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!
View our latest analysis for Monster Beverage
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Monster Beverage Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Monster Beverage. Specifically, insiders ditched US$1.1m 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.
Insider Ownership Of Monster Beverage
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Monster Beverage insiders own 0.4% of the company, worth about US$216m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.