Rosenthal James A: insider trades

Officer at Morgan Stanley. No open-market purchases and 11 sales not made under a pre-set plan, reported from July 22, 2011 to November 21, 2016.

What happened after Rosenthal James A’s sales?

After their sales, the shares moved +8.2% against the index over 12 months on average (a negative figure means selling was the right call); 36% trailed it.

With 296 insiders tested, some will look skilled or unskilled by chance alone: when we replaced each insider’s stocks with random companies bought on the same days, about 5.7 cleared the bar ahead and 23.3 behind. One record on its own proves little.

Trade by trade

Rosenthal James A: trades against the S&P 500 afterwards
Measured	Trades counted	Average vs S&P 500	Median	Went the right way	Years	t-statistic	p-value	Evidence
Purchases, 3 months after the report	0	—	—	—	—	—	—	Not enough years
Purchases, 6 months after the report	0	—	—	—	—	—	—	Not enough years
Purchases, 12 months after the report	0	—	—	—	—	—	—	Not enough years
Purchases, 12 months after the trade	0	—	—	—	—	—	—	Not enough years
Sales, 3 months after the report	11	+4.1%	+4.9%	36%	5	−0.23	0.83	No reliable evidence
Sales, 12 months after the report	11	+8.2%	+9.5%	36%	5	−0.42	0.70	No reliable evidence
Sales, 12 months after the trade	11	+9.1%	+6.8%	27%	5	−0.36	0.74	No reliable evidence

“Average vs S&P 500” is the stock’s return including dividends minus the index’s over the same dates, from the close on the first trading day after the report, or from the close on the trade date. Only windows that have finished are counted. For sales, a negative figure means the stock lagged after it was sold, so selling was the right call (green). “Went the right way” is the share of purchases that beat the index, or of sales that trailed it. The t-statistic uses one average per year of reports, because one person’s trades bunch into the same stock and weeks, and needs trades in at least four different years; the p-value comes from the t distribution with that number of years (with four years, a t of 2 has p = 0.14). “Some evidence” means p under 5%, “strong evidence” p under 1% over at least six years.

Companies traded

Company	Title on the latest filing	Purchases	Sales	First report	Latest report
Morgan Stanley MS	Chief Operating Officer	0	11	July 22, 2011	November 21, 2016

Trades and what followed

Moves are against the S&P 500; green means the trade went the insider’s way.

Reported	Traded	Company	Trade	Value	3 months after report	12 months after report	12 months after trade
November 21, 2016	November 18, 2016	MS	Sale	$4,485,808	+4.9%	+3.3%	+3.2%
October 31, 2016	October 27, 2016	MS	Sale	$2,253,685	+18.3%	+27.2%	+30.1%
October 24, 2016	October 20, 2016	MS	Sale	$6,208,650	+25.1%	+33.0%	+34.6%
July 27, 2016	July 25, 2016	MS	Sale	$2,656,840	+17.3%	+48.8%	+50.5%
March 1, 2016	February 26, 2016	MS	Sale	$1,256,500	−0.3%	+59.0%	+62.3%
August 4, 2015	July 31, 2015	MS	Sale	$471,000	−15.2%	−31.1%	−30.2%
April 21, 2015	April 21, 2015	MS	Sale	$1,856,113	+8.6%	−26.7%	−26.4%
July 18, 2014	July 18, 2014	MS	Sale	$1,001,000	+6.4%	+15.3%	+14.6%
February 13, 2014	February 12, 2014	MS	Sale	$1,011,030	−0.8%	+9.5%	+6.8%
August 2, 2013	July 31, 2013	MS	Sale	$351,062	+1.3%	−0.8%	+3.3%
July 22, 2011	July 22, 2011	MS	Sale	$189,785	−19.9%	−47.4%	−49.1%

Open-market purchases and sales of at least $10,000 in companies we cover, from SEC Form 4 filings; sales made under a pre-set Rule 10b5-1 plan are not shown. “Not yet” means the window has not finished or the share price was under $5 at entry. These are the shares’ moves after each trade: they say nothing about why Rosenthal James A traded and do not suggest the use of non-public information. How every insider compares · the insider trading backtest.