Stock Analysis

Madison Square Garden Sports Corp. (NYSE:MSGS) Insiders Have Been Selling

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NYSE:MSGS
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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 shareholders might well want to know whether insiders have been buying or selling shares in Madison Square Garden Sports Corp. (NYSE:MSGS).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Madison Square Garden Sports

Madison Square Garden Sports Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive VP & General Counsel, Lawrence Burian, sold US$2.0m worth of shares at a price of US$304 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$184. So it may not tell us anything about how insiders feel about the current share price.

Over the last year we saw more insider selling of Madison Square Garden Sports shares, than buying. You can see the insider transactions (by companies and 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!

insider-trading-volume
NYSE:MSGS Insider Trading Volume January 4th 2021

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Does Madison Square Garden Sports Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Madison Square Garden Sports insiders own about US$859m worth of shares (which is 19% 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 Madison Square Garden Sports Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Madison Square Garden Sports insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for Madison Square Garden Sports and we suggest you have a look.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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What are the risks and opportunities for Madison Square Garden Sports?

Madison Square Garden Sports Corp. operates as a professional sports company.

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Rewards

  • Became profitable this year

Risks

  • Earnings are forecast to decline by an average of 6.6% per year for the next 3 years

  • Negative shareholders equity

  • Has a high level of debt

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1Y Return

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