Should You Be Worried About Insider Transactions At Jacobs Engineering Group Inc. (NYSE:JEC)?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Jacobs Engineering Group Inc. (NYSE:JEC).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'

View our latest analysis for Jacobs Engineering Group

The Last 12 Months Of Insider Transactions At Jacobs Engineering Group

Chief Operating Officer Terence Hagen made the biggest insider sale in the last 12 months. That single transaction was for US$313k worth of shares at a price of US$62.65 each. So what is clear is that an insider saw fit to sell at around the current price of US$59.52. 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.

All up, insiders sold more shares in Jacobs Engineering Group than they bought, over the last year. They sold for an average price of about US$63.05. 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. The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Jacobs Engineering Group better if I see some big insider buys. While we wait, check out this freelist of growing companies with considerable, recent, insider buying.

Insider Ownership of Jacobs Engineering Group

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. Jacobs Engineering Group insiders own about US$37m worth of shares (which is 0.5% of the company). 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 Does This Data Suggest About Jacobs Engineering Group Insiders?

The fact that there have been no Jacobs Engineering Group insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Jacobs Engineering Group insiders. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in Jacobs Engineering Group, you should check out this freereport on analyst forecasts for the company.

Of course Jacobs Engineering Group may not be the best stock to buy. So you may wish to see this freecollection of high quality companies.

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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 editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.