This Insider Has Just Sold Shares In Microsoft

Some Microsoft Corporation (NASDAQ:MSFT) shareholders may be a little concerned to see that the Executive Vice President of Business Development, Christopher Young, recently sold a substantial US$3.1m worth of stock at a price of US$424 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 8.5%.

See our latest analysis for Microsoft

Microsoft Insider Transactions Over The Last Year

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. That means that an insider was selling shares at slightly below the current price (US$425). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. This single sale was just 8.7% of Bradford Smith's stake.

Microsoft insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Microsoft insiders own 0.03% of the company, worth about US$1.0b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Microsoft Tell Us?

Insiders haven't bought Microsoft stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Microsoft is profitable and growing, we're not too worried by this. 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. Every company has risks, and we've spotted 1 warning sign for Microsoft you should know about.

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.