Trade Alert: Chief People & Company Services Officer Of J. M. Smucker Jill Penrose Has Sold Stock

We wouldn't blame The J. M. Smucker Company (NYSE:SJM) shareholders if they were a little worried about the fact that Jill Penrose, the Chief People & Company Services Officer recently netted about US$595k selling shares at an average price of US$116. That sale reduced their total holding by 31% which is hardly insignificant, but far from the worst we've seen.

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

The CEO, President & Chairman, Mark Smucker, made the biggest insider sale in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$110 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$119. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 4.4% of Mark Smucker's stake.

All up, insiders sold more shares in J. M. Smucker than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for J. M. Smucker

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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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that J. M. Smucker insiders own 3.5% of the company, worth about US$438m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The J. M. Smucker Insider Transactions Indicate?

Unfortunately, there has been more insider selling of J. M. Smucker stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 3 warning signs for J. M. Smucker (1 is significant) you should be aware of.

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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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.