Insiders at The J. M. Smucker Company (NYSE:SJM) sold US$2.3m worth of stock, a potential red flag that needs to be monitored

By
Simply Wall St
Published
April 12, 2022
NYSE:SJM
Source: Shutterstock

While The J. M. Smucker Company (NYSE:SJM) shareholders have had a good week with the stock up 3.6%, they shouldn't let their guards down. The fact that insiders chose to dispose of US$2.3m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for J. M. Smucker

The Last 12 Months Of Insider Transactions At J. M. Smucker

The CEO, President & Director, Mark Smucker, made the biggest insider sale in the last 12 months. That single transaction was for US$1.3m worth of shares at a price of US$131 each. That means that an insider was selling shares at slightly below the current price (US$139). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 5.1% of Mark Smucker's holding.

In the last year J. M. Smucker insiders didn't buy any company stock. 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!

insider-trading-volume
NYSE:SJM Insider Trading Volume April 12th 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does J. M. Smucker Boast High Insider Ownership?

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that J. M. Smucker insiders own 3.6% of the company, worth about US$542m. 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 J. M. Smucker Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of J. M. Smucker 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. Case in point: We've spotted 2 warning signs for J. M. Smucker you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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