Madison Square Garden Sports Insiders Sell US$3.3m Of Stock, Possibly Signalling Caution

In the last year, many Madison Square Garden Sports Corp. (NYSE:MSGS) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Madison Square Garden Sports

In the last twelve months, the biggest single sale by an insider was when the Executive Chairman & CEO, James Dolan, sold US$2.0m worth of shares at a price of US$200 per share. That means that even when the share price was slightly below the current price of US$202, 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 5.5% of James Dolan's holding.

Madison Square Garden Sports insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Madison Square Garden Sports

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Madison Square Garden Sports insiders own about US$61m worth of shares. That equates to 1.3% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the 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. Our analysis of Madison Square Garden Sports insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Madison Square Garden Sports. Our analysis shows 3 warning signs for Madison Square Garden Sports (1 is a bit unpleasant!) and we strongly recommend you look at these before investing.

But note: Madison Square Garden Sports 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 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.