We wouldn't blame MSCI Inc. (NYSE:MSCI) shareholders if they were a little worried about the fact that Benjamin DuPont, the Independent Director recently netted about US$1.9m selling shares at an average price of US$239. That's a big dump, and it decreased their holding size by 40%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At MSCI
In the last twelve months, the biggest single sale by an insider was when the MD & Chief Human Resources Officer, Scott Crum, sold US$3.3m worth of shares at a price of US$175 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$245. 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 41% of Scott Crum's holding.
We note that in the last year insiders divested 27000 shares for a total of US$5.2m. MSCI insiders didn't buy any shares over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of MSCI
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. MSCI insiders own about US$672m worth of shares (which is 3.2% 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 MSCI Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. And even if we look to the last year, we didn't see any purchases. But since MSCI is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for MSCI.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.