Watching insiders is like participating in a weeks-long stakeout. You expect something to happen, but you don't know what. So you settle in, sip your coffee, and wait for clues to solving the big case.
Here, the "case" is direction: Which way is your stock headed? The "clues" come in the form of insider buying and selling action. Have a look at JPMorgan Chase
Insider Rating |
Bearish
|
Business Description |
One of the nation's largest banks, and arguably the best positioned after it acquired valuable assets at depressed prices during last year's meltdown. |
Recent Price |
$46.47 |
CAPS Stars (Out of 5) |
** |
Percentage of Shares Owned by Insiders |
0.60% |
Net Buying (Selling)* |
$21.3 mil., including $10.5 mil. in preferred stock |
Last Buyer (% Increase) |
David Novak, director |
Last Seller (% Decrease) |
James Staley, Managing Director |
Competitors |
Bank of America |
CAPS Members Bullish on JPM Also Bullish on |
General Electric |
CAPS Members Bearish on JPM Also Bearish on |
Goldman Sachs |
Recent Foolish Coverage of JPM |
Buffett and Bogle Bash Wall Street |
Sources: Form 4 Oracle, Capital IQ, and Motley Fool CAPS. (Data current as of Sept. 22.)
*Open market sales and purchases only.
What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.
Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.
The Foolish view: bearish
Last year at this time, we were wondering if any bank would survive. Now, all we can do is marvel at how well JPMorgan Chase and several of its peers have returned from what seemed like financial abyss.
But most of these financial stocks are speculative plays. We know, for example, that AIG
JPMorgan Chase, on the other hand, is better positioned than most thanks to assets it acquired on the cheap from Washington Mutual. Insiders -- especially CEO Jamie Dimon -- bet big on their company's stock as others sold. Today, Dimon and Executive Vice President Heidi Miller are basically sitting on a double.
But I'm guessing their next move is a sale. My Foolish colleague and bank expert Morgan Housel is equally cautious when it comes to this stock:
No one doubts that JPMorgan is the strongest of the big banks. But, come on, shares are only 15% off the all-time high. However anecdotal that might be, it seems sketchy in light of the current economy. Sure, synergies from Washington Mutual and Bear Stearns could add a pretty penny to its bottom line, but the degree they will is still far from certain.
Do you agree? Disagree? Log into CAPS today and tell us how you would rate JPMorgan Chase.
And if you want me to take a Foolish peek at the insider action of your favorite stock, email me here or use the comments box below. I'll write this column as often as you, our readers, demand.
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