This Insider Has Just Sold Shares In Microsoft

We wouldn't blame Microsoft Corporation (NASDAQ:MSFT) shareholders if they were a little worried about the fact that Amy Hood, the Executive VP & CFO recently netted about US$16m selling shares at an average price of US$411. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.7%.

View our latest analysis for Microsoft

The Last 12 Months Of Insider Transactions At Microsoft

Over the last year, we can see that the biggest insider sale was by the President & Vice Chairman, Bradford Smith, for US$20m worth of shares, at about US$412 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$423. 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 8.7% of Bradford Smith's holding.

Insiders in Microsoft 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Does Microsoft Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Microsoft insiders own 0.04% of the company, currently worth about US$1.1b based on the recent share price. 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 Does This Data Suggest About Microsoft Insiders?

Insiders haven't bought Microsoft stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Microsoft is growing earnings. 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. While conducting our analysis, we found that Microsoft has 1 warning sign and it would be unwise to ignore this.

Of course Microsoft 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 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.