Some shareholders of Microsoft Corporation(NASDAQ:MSFT) may be a little concerned seeing that Executive Vice President of Business Development Christopher Young recently sold a substantial amount of shares worth $3.1 million at a price of $424 per share. However, it is crucial to note that they remain heavily invested in the stock and that sale only reduced their stake by 8.5%.
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Microsoft Insider transactions in the last year
In the last year, we can see that the largest insider sale of shares was made by President and Vice President, Bradford Smith, worth $20 million, at about $412 per share. This means that an insider sold shares slightly below the current price ($425). When an insider sells below the current price, it suggests that they consider that lower price to be fair. That makes us wonder what they think of the recent (higher) valuation. Keep in mind, however, that sellers may have various reasons for selling, so we don’t know for sure what they think of the stock price. This single sale accounted for only 8.7% of Bradford Smith’s stake.
Microsoft insiders didn’t buy shares last year. Below you can see a visual representation of insider transactions (by companies and individuals) over the last 12 months. By clicking on the chart below, you can see the precise details of each insider transaction.
NasdaqGS:MSFT Insider Trading Volume November 14, 2024
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Possession of insider information
If we look at the total shares of a company held by insiders, we can get an idea of whether they are well aligned with common shareholders. Typically, the greater the ownership of insider shareholders, the more likely they are to be incentivized to build the company for the long term. It’s great to see that Microsoft insiders own 0.03% of the company, worth about $1 billion. Most shareholders would be happy to see this type of involvement, as it suggests that management’s incentives are well aligned with those of other shareholders.
What can insider trading at Microsoft tell us?
Insiders haven’t bought Microsoft stock in the last three months, but there was some selling. And there were no purchases that comfort us, in the last year. But since Microsoft is profitable and growing, we’re not too concerned. The company boasts high insider ownership, but we’re a little hesitant given the history of share sales. So these insider trades can help us build a thesis about value, but it’s also worth knowing the risks this company faces. All companies have risks, and we have detected a warning sign for Microsoft that you should know.
Of course, Microsoft may not be the best stock to buy. Therefore, you may be interested in seeing this collection free from high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently only account for open market transactions and private dispositions of direct holdings, but not derivative transactions or indirect holdings.
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This Simply Wall St article is of a general nature. We provide commentary based solely on historical data and analyst forecasts using an unbiased methodology and our articles are not intended to be financial advice. They do not constitute a recommendation to buy or sell securities and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative material. Simply Wall St has no positions in any of the securities mentioned.
