We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in J.B. Hunt Transport Services, Inc. ( NASDAQ:JBHT ).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
J.B. Hunt Transport Services Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Information Officer, Stuart Scott, sold US$1.0m worth of shares at a price of US$103 per share. That means that even when the share price was slightly below the current price of US$104, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 38.2% of Stuart Scott's stake.
Happily, we note that in the last year insiders paid US$909k for 9819 shares. But they sold 40812 for US$4.2m. In total, J.B. Hunt Transport Services insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at J.B. Hunt Transport Services Have Sold Stock Recently
The last quarter saw substantial insider selling of J.B. Hunt Transport Services shares. Specifically, insiders ditched US$2.8m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. J.B. Hunt Transport Services insiders own 21% of the company, currently worth about US$2.3b 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 J.B. Hunt Transport Services Insiders?
Insiders sold J.B. Hunt Transport Services shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Of course, the future is what matters most . So if you are interested in J.B. Hunt Transport Services, you should check out this free report on analyst forecasts for the company .
But note: J.B. Hunt Transport Services may not be the best stock to buy . So take a peek at this free list of interesting companies with high ROE and low debt.
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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.