Finance

Dissecting the Insider Trading Patterns of J. C. Penney Company, Inc. (JCP)

Recent insider trends for J. C. Penney Company, Inc. (NYSE:JCP) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. JCP’s insider trading patterns have some implications for where the stock might be headed.

Institutions own 72.76% of J. C. Penney Company, Inc. (JCP)’s shares. The total value of these holdings, in millions, is $787. Among active positions in the latest quarter, 132 holders increased their positions by a total of 49.46 million shares, 165 holders decreased the positions by a total of 66.04 million shares, and 43 holders held their positions. This works out to a net decrease in ownership of 16.57 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 42 holders initiated new positions by a total of 13.19 million shares and 83 holders exited their positions by a total of 27.73 million shares. This nets out to a decrease of 14.54 million shares and is another bearish sign for JCP.

In the last three months, insiders executed a total of 11 trades. 9 of these were buys and 2 were sells. Insider ownership increased by a total of 443182 shares, which suggests that JCP’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: insiders executed 43 buys and 13 sells, and ownership increased by a net of 1.72 million shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. J. C. Penney Company, Inc. (NYSE:JCP)’s short interest is 137.9 million shares, or 47.17% of the float. This represents an increase of 1% in the number of shares being shorted compared to the previous reading, and implies that investors felt more pessimistic about the stock during the past two weeks.

Supplementing insider data with technical indicators can help an investor form a more complete view on the outlook for a stock. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that JCP is a Strong sell, which implies that JCP is expected to underperform the market based on prior trading patterns.

Conclusion




Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bullish. Technical indicators (also) suggest that J. C. Penney Company, Inc. (NYSE:JCP) is overvalued.

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