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 shareholders might well want to know whether insiders have been buying or selling shares in The J. M. Smucker Company (NYSE:SJM).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
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J. M. Smucker Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Barry Dunaway for US$1.1m worth of shares, at about US$106 per share. So what is clear is that an insider saw fit to sell at around the current price of US$102. 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.
Happily, we note that in the last year insiders paid US$1.7m for 16.50k shares. But they sold 20.36k for US$2.2m. In total, J. M. Smucker insiders sold more than they bought over the last year. They sold for an average price of about US$107. It’s not particularly great to see insiders were selling shares at below recent prices. But we wouldn’t put too much weight on the insider selling. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
J. M. Smucker is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at J. M. Smucker Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at J. M. Smucker. Insiders spent US$1.1m on shares. On the other hand, David Lemmon netted US$95k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
For a common shareholder, it is worth checking how many shares are held by company 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. J. M. Smucker insiders own about US$431m worth of shares (which is 3.9% 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.
What Might The Insider Transactions At J. M. Smucker Tell Us?
It’s certainly positive to see the recent insider purchases. But we can’t say the same for the transactions over the last 12 months. The recent buying by some insiders, along with high insider ownership, suggest that J. M. Smucker insiders are fairly aligned, and optimistic. Of course, the future is what matters most. So if you are interested in J. M. Smucker, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
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 email@example.com.