Finance

What the Insider Data Suggests About JPMorgan Chase & Co. (JPM)

Recent insider trends for JPMorgan Chase & Co. (NYSE:JPM) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. JPM’s insider trading patterns have some implications for where the stock might be headed.

Institutions own 74.77% of JPMorgan Chase & Co. (JPM)’s shares. The total value of these holdings, in millions, is $254,811. Among active positions in the latest quarter, 1,088 holders increased their positions by a total of 76.28 million shares, 912 holders decreased the positions by a total of 115.71 million shares, and 253 holders held their positions. This works out to a net decrease in ownership of 39.44 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 140 holders initiated new positions by a total of 6.99 million shares and 61 holders exited their positions by a total of 13.5 million shares. This nets out to a decrease of 6.51 million shares and is another bearish sign for JPM.

In the last three months, insiders executed a total of 11 trades. 8 of these were buys and 3 were sells. Insider ownership decreased by a total of 25227 shares, which suggests that JPM’s key executives are feeling less optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: insiders executed 47 buys and 45 sells, and ownership decreased by a net of 1.49 million shares.



Analysts often look at short interest, or the number of shares currently being shorted by investors, to aid in their outlook for a particular stock. JPMorgan Chase & Co. (NYSE:JPM)’s short interest is 29.22 million shares, or % of the float. This represents a decrease of -2% in the number of shares being shorted compared to the previous reading, and implies that investors felt less pessimistic about the stock during the past two weeks.

Given what the insider ownership patterns are saying, it makes sense to consider the technicals to see if these pieces of information reach the same conclusion about the outlook for JPM. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that JPM is a buy, which implies that JPM is expected to outperform 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 bearish. Technical indicators (also) suggest that JPMorgan Chase & Co. (NYSE:JPM) is undervalued.

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