Stock Analysis

As JDE Peet's N.V. (AMS:JDEP) drops to €13b market cap, insiders might rethink their €25m stock purchase earlier this year

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The recent price decline of 5.4% in JDE Peet's N.V.'s (AMS:JDEP) stock may have disappointed insiders who bought €25m worth of shares at an average price of €28.60 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth €23m which is not ideal.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for JDE Peet's

JDE Peet's Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Olivier C. Goudet for €24m worth of shares, at about €28.64 per share. That means that an insider was happy to buy shares at above the current price of €26.50. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Olivier C. Goudet was also the biggest seller.

Over the last year, we can see that insiders have bought 870.61k shares worth €25m. But they sold 851.85k shares for €24m. Overall, JDE Peet's insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

ENXTAM:JDEP Insider Trading Volume March 31st 2023

JDE Peet's is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does JDE Peet's Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. JDE Peet's insiders own 3.2% of the company, currently worth about €414m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At JDE Peet's Tell Us?

The fact that there have been no JDE Peet's insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like JDE Peet's insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing JDE Peet's. While conducting our analysis, we found that JDE Peet's has 1 warning sign and it would be unwise to ignore it.

But note: JDE Peet's 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, but not derivative transactions.

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