On June 29, 2023, Mark Mcgivney, the Chief Financial Officer of Marsh & McLennan Companies Inc (MMC, Financial), sold 70,106 shares of the company. This move is part of a trend observed over the past year, where Mcgivney has sold a total of 143,147 shares and made no purchases.
Marsh & McLennan Companies Inc is a global professional services firm offering clients advice and solutions in risk, strategy, and people. With annual revenue exceeding $17 billion, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman.
Mark Mcgivney has been with Marsh & McLennan Companies Inc since 2007 and has served as the CFO since 2018. His recent sell-off of shares is noteworthy and prompts an analysis of insider buy/sell trends and their relationship with the stock price.
The insider transaction history for Marsh & McLennan Companies Inc shows a clear trend of insider selling. Over the past year, there have been 12 insider sells and no insider buys. This could indicate that insiders believe the company's stock is currently overvalued, prompting them to sell their shares.
On the day of Mcgivney's recent sell, MMC shares were trading at $185.53, giving the company a market cap of $93.05 billion. The price-earnings ratio stands at 29.43, significantly higher than the industry median of 13.17 and the company's historical median price-earnings ratio. This suggests that the stock may be overpriced.
According to the GuruFocus Value, which is an intrinsic value estimate based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates, MMC's stock is fairly valued. With a price of $185.53 and a GuruFocus Value of $172.65, the price-to-GF-Value ratio stands at 1.07.
While the insider sell-off trend and the high price-earnings ratio might raise some concerns, the fair valuation according to the GuruFocus Value suggests that the stock's current price is justified by its fundamentals. Investors should keep a close eye on MMC's future performance and any changes in insider trading trends.
As always, insider trading activities should not be used as a sole deciding factor in making an investment decision, but rather as a warning flag for further investigation.
