Don't Ignore The Insider Selling In Morgan Stanley

We wouldn't blame Morgan Stanley (NYSE:MS) shareholders if they were a little worried about the fact that Andrew Saperstein, the Co-President recently netted about US$6.1m selling shares at an average price of US$141. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.

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The Last 12 Months Of Insider Transactions At Morgan Stanley

The insider, Stephen Luczo, made the biggest insider sale in the last 12 months. That single transaction was for US$7.2m worth of shares at a price of US$119 each. That means that an insider was selling shares at slightly below the current price (US$140). 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. We note that the biggest single sale was only 26% of Stephen Luczo's holding.

Insiders in Morgan Stanley didn't buy any shares in 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!

See our latest analysis for Morgan Stanley

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Insider Ownership Of Morgan Stanley

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Morgan Stanley insiders own about US$448m worth of shares (which is 0.2% 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 Do The Morgan Stanley Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Morgan Stanley is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Morgan Stanley that deserve your attention before buying any shares.

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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.