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Over the past year, many Morgan Stanley (NYSE:MS) 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, if numerous insiders are selling, shareholders should investigate more.
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.
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The Last 12 Months Of Insider Transactions At Morgan Stanley
Over the last year, we can see that the biggest insider sale was by the Executive Chairman, James Gorman, for US$21m worth of shares, at about US$105 per share. That means that even when the share price was below the current price of US$132, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 26% of James Gorman's stake.
Morgan Stanley insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Insiders At Morgan Stanley Have Sold Stock Recently
The last quarter saw substantial insider selling of Morgan Stanley shares. In total, Independent Director Stephen Luczo dumped US$7.2m 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 Morgan Stanley
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. Morgan Stanley insiders own about US$360m worth of shares (which is 0.2% 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.