We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell MSA Safety Incorporated (NYSE:MSA), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At MSA Safety
In the last twelve months, the biggest single sale by an insider was when the Director, L. Shaw, sold US$5.2m worth of shares at a price of US$104 per share. That means that an insider was selling shares at slightly below the current price (US$107). 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 8.8% of L. Shaw’s stake.
Over the last year, we note insiders sold 110k shares worth US$11m. In the last year MSA Safety insiders didn’t buy any company stock. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like MSA Safety better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
MSA Safety Insiders Are Selling The Stock
The last three months saw significant insider selling at MSA Safety. Specifically, insiders ditched US$7.7m 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 MSA Safety Boast High Insider Ownership?
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. MSA Safety insiders own about US$330m worth of shares (which is 8.0% of the company). 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 MSA Safety Insiders?
Insiders sold MSA Safety shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. But it is good to see that MSA Safety is growing earnings. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for MSA Safety.
But note: MSA Safety may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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