Finance

Are Johnson & Johnson (JNJ)’s Recent Ownership and Insider Trends a Sign of Things to Come?

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

Institutions own 67.93% of Johnson & Johnson (JNJ)’s shares. The total value of these holdings, in millions, is $241,712. Among active positions in the latest quarter, 1,162 holders increased their positions by a total of 64.78 million shares, 1,218 holders decreased the positions by a total of 47.44 million shares, and 242 holders held their positions. This works out to a net increase in ownership of 17.34 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 274 holders initiated new positions by a total of 9.71 million shares and 44 holders exited their positions by a total of 5.18 million shares. This nets out to an increase of 4.53 million shares and is a bullish sign for JNJ.

In the last three months, insiders executed a total of 27 trades. 8 of these were buys and 19 were sells. Insider ownership decreased by a total of 265192 shares, which suggests that JNJ’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 8 buys and 25 sells, and ownership decreased by a net of 495179 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. Johnson & Johnson (NYSE:JNJ)’s short interest is 16.71 million shares, or % of the float. This represents a decrease of -5% 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.

In light of the insider ownership and trading data it makes sense to consider technicals to see if they come to a similar conclusion about the outlook for JNJ. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that JNJ is a Weak sell, which implies that JNJ 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 bearish. Technical indicators (also) suggest that Johnson & Johnson (NYSE:JNJ) is overvalued.

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