Should You Review Recent Insider Transactions At Jefferies Financial Group Inc. (NYSE:JEF)?

By
Simply Wall St
Published
October 21, 2020
NYSE:JEF

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 we'll take a look at whether insiders have been buying or selling shares in Jefferies Financial Group Inc. (NYSE:JEF).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for Jefferies Financial Group

Jefferies Financial Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Co-Founder & Chairman, Joseph Steinberg, sold US$16m worth of shares at a price of US$21.03 per share. So we know that an insider sold shares at around the present share price of US$19.93. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. The only individual insider seller over the last year was Joseph Steinberg.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:JEF Insider Trading Volume October 21st 2020

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Jefferies Financial Group Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Jefferies Financial Group insiders own 19% of the company, currently worth about US$988m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Jefferies Financial Group Tell Us?

It doesn't really mean much that no insider has traded Jefferies Financial Group shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Jefferies Financial Group insider transactions don't fill us with confidence. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 2 warning signs for Jefferies Financial Group that deserve your attention before buying any shares.

But note: Jefferies Financial Group 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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This article by Simply Wall St is general in nature. 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.
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