Some Jardine Matheson Holdings Limited (SGX:J36) shareholders may be a little concerned to see that the Executive Chairman, Benjamin Keswick, recently sold a substantial US$1.9m worth of stock at a price of US$37.77 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 0.4%.
Jardine Matheson Holdings Insider Transactions Over The Last Year
In fact, the recent sale by Executive Chairman Benjamin Keswick was not their only sale of Jardine Matheson Holdings shares this year. They previously made an even bigger sale of -US$10.0m worth of shares at a price of US$37.01 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$37.05. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 2.2% of Benjamin Keswick's holding.
Over the last year, we can see that insiders have bought 119.70k shares worth US$4.2m. On the other hand they divested 320.78k shares, for US$12m. Benjamin Keswick sold a total of 320.78k shares over the year at an average price of US$36.96. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Jardine Matheson Holdings insiders own 6.9% of the company, currently worth about US$740m based on the recent share price. 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 Does This Data Suggest About Jardine Matheson Holdings Insiders?
An insider sold Jardine Matheson Holdings shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 4 warning signs with Jardine Matheson Holdings and understanding these should be part of your investment process.
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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.
