Don't Ignore The Insider Selling In J D Wetherspoon

We wouldn't blame J D Wetherspoon plc (LON:JDW) shareholders if they were a little worried about the fact that Timothy Martin, the Executive Chairman recently netted about UK£10m selling shares at an average price of UK£7.39. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 4.3%.

Check out our latest analysis for J D Wetherspoon

The Last 12 Months Of Insider Transactions At J D Wetherspoon

In fact, the recent sale by Timothy Martin was the biggest sale of J D Wetherspoon shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of UK£7.39. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Happily, we note that in the last year insiders paid UK£115k for 17.69k shares. On the other hand they divested 1.37m shares, for UK£10m. Over the last year we saw more insider selling of J D Wetherspoon shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. 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 that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that J D Wetherspoon insiders own 26% of the company, worth about UK£229m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About J D Wetherspoon Insiders?

Unfortunately, there has been more insider selling of J D Wetherspoon stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 4 warning signs for J D Wetherspoon (1 is significant!) that we believe deserve your full attention.

Of course J D Wetherspoon may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com