Are Insiders Selling Mastercard Incorporated (NYSE:MA) Stock?
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Mastercard Incorporated (NYSE:MA), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Mastercard Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Director David Carlucci for US$1.1m worth of shares, at about US$183 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$195. While their view may have changed since they sold, this isn’t a particularly bullish sign. As a general rule we consider it to be discouraging when insiders are selling below the current price. It is worth noting that this sale was only 11.2% of David Carlucci’s holding. David Carlucci was the only individual insider to sell shares in the last twelve months.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Mastercard Insiders Bought Stock Recently
It’s good to see that Mastercard insiders have made notable investments in the company’s shares. We can see that Richard Davis paid US$486k for shares in the company. No-one sold. That shows some optimism about the company’s future.
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. We usually like to see fairly high levels of insider ownership. It’s great to see that Mastercard insiders own 0.08% of the company, worth about US$152m. 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 Mastercard Tell Us?
It’s certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. The recent buying by an insider, along with high insider ownership, suggest that Mastercard insiders are fairly aligned, and optimistic. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Mastercard may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
