We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell The J. M. Smucker Company (NYSE:SJM), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. 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.’
The Last 12 Months Of Insider Transactions At J. M. Smucker
Barry Dunaway made the biggest insider sale in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$106 each. So we know that an insider sold shares at around the present share price of US$95.88. While their view may have changed since the sale, this is not a particularly positive fact. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
In the last twelve months insiders purchased 16.50k shares for US$1.7m. On the other hand they divested 20.36k shares, for US$2.2m. Over the last year we saw more insider selling of J. M. Smucker shares, than buying. The average sell price was around US$107. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
J. M. Smucker Insiders Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at J. M. Smucker. In total, 2 insiders bought US$1.1m worth of shares in that time. But we did see David Lemmon sell shares worth US$95k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of J. M. Smucker
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that J. M. Smucker insiders own 3.9% of the company, worth about US$431m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At J. M. Smucker Tell Us?
The recent insider purchases are heartening. However, the longer term transactions are not so encouraging. The recent buying by some insiders, along with high insider ownership, suggest that J. M. Smucker insiders are fairly aligned, and optimistic. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for J. M. Smucker.
Of course J. M. Smucker 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 firstname.lastname@example.org.