Don't Ignore The Insider Selling In MGM Resorts International

We wouldn't blame MGM Resorts International (NYSE:MGM) shareholders if they were a little worried about the fact that Corey Sanders, the Chief Operating Officer recently netted about US$1.1m selling shares at an average price of US$45.21. That sale reduced their total holding by 13% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for MGM Resorts International

The Last 12 Months Of Insider Transactions At MGM Resorts International

Notably, that recent sale by Corey Sanders is the biggest insider sale of MGM Resorts International shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$45.83). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 13% of Corey Sanders's holding.

Over the last year we saw more insider selling of MGM Resorts International shares, than buying. 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does MGM Resorts International 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. A high insider ownership often makes company leadership more mindful of shareholder interests. MGM Resorts International insiders own about US$100m worth of shares (which is 0.6% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At MGM Resorts International Tell Us?

Insiders haven't bought MGM Resorts International stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for MGM Resorts International you should be aware of.

But note: MGM Resorts International 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.

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, but not derivative transactions.

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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.