Stock Analysis

Who Has Been Selling Morgan Stanley (NYSE:MS) Shares?

  •  Updated
NYSE:MS
Source: Shutterstock

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Morgan Stanley (NYSE:MS).

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 in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Morgan Stanley

Morgan Stanley Insider Transactions Over The Last Year

The Chairman & CEO, James Gorman, made the biggest insider sale in the last 12 months. That single transaction was for US$13m worth of shares at a price of US$73.59 each. That means that even when the share price was below the current price of US$76.87, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 14% of James Gorman's holding.

Happily, we note that in the last year insiders paid US$2.1m for 44.00k shares. But they sold 698.14k shares for US$45m. Over the last year we saw more insider selling of Morgan Stanley shares, than buying. They sold for an average price of about US$64.82. It's not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:MS Insider Trading Volume March 1st 2021

I will like Morgan Stanley better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders at Morgan Stanley Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Morgan Stanley. Specifically, insiders ditched US$30m 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?

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$362m worth of shares (which is 0.3% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Morgan Stanley Insiders?

Insiders haven't bought Morgan Stanley stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. But since Morgan Stanley is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Morgan Stanley is showing 3 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

Of course Morgan Stanley 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, but not derivative transactions.

When trading Morgan Stanley or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


Valuation is complex, but we're helping make it simple.

Find out whether Morgan Stanley is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis