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Many Morgan Stanley (NYSE:MS) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Morgan Stanley
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 an insider was selling shares at slightly below the current price (US$126). 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. It is worth noting that this sale was only 26% of James Gorman's holding.
Insiders in Morgan Stanley didn't buy any shares in 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!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Morgan Stanley Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Morgan Stanley. 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.
Does Morgan Stanley Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Morgan Stanley insiders own 0.2% of the company, currently worth about US$347m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.