Don't Ignore The Insider Selling In MSC Industrial Direct

We wouldn't blame MSC Industrial Direct Co., Inc. (NYSE:MSM) shareholders if they were a little worried about the fact that Erik Gershwind, the CEO & Director recently netted about US$4.5m selling shares at an average price of US$90.36. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 2.4%.

Check out our latest analysis for MSC Industrial Direct

The Last 12 Months Of Insider Transactions At MSC Industrial Direct

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Chairman, Mitchell Jacobson, sold US$15m worth of shares at a price of US$97.66 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$85.45. So it is hard to draw any strong conclusion from it.

MSC Industrial Direct 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like MSC Industrial Direct better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 MSC Industrial Direct insiders own 22% of the company, worth about US$1.1b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About MSC Industrial Direct Insiders?

Insiders sold MSC Industrial Direct shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for MSC Industrial Direct you should know about.

Of course MSC Industrial Direct may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.