In the last year, many JPMorgan Chase & Co. (NYSE:JPM) insiders sold a substantial stake in the company which may have sparked shareholders’ attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for JPMorgan Chase
The Last 12 Months Of Insider Transactions At JPMorgan Chase
In the last twelve months, the biggest single sale by an insider was when the President & COO, Daniel Pinto, sold US$15m worth of shares at a price of US$136 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$172. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was only 17% of Daniel Pinto’s holding.
All up, insiders sold more shares in JPMorgan Chase than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
JPMorgan Chase Insiders Are Selling The Stock
The last quarter saw substantial insider selling of JPMorgan Chase shares. Specifically, Co-Chief Executive Officer of Consumer & Community Banking Marianne Lake ditched US$5.2m worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Does JPMorgan Chase Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It’s great to see that JPMorgan Chase insiders own 0.4% of the company, worth about US$1.9b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The JPMorgan Chase Insider Transactions Indicate?
An insider hasn’t bought JPMorgan Chase stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, JPMorgan Chase makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. At Simply Wall St, we’ve found that JPMorgan Chase has 2 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.
But note: JPMorgan Chase may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Source: finance.yahoo.com
