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Over the past year, many Johnson & Johnson (NYSE:JNJ) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Johnson & Johnson
Johnson & Johnson Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Human Resources Officer, Peter Fasolo, sold US$3.4m worth of shares at a price of US$170 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$155. So it is hard to draw any strong conclusion from it.
Insiders in Johnson & Johnson didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Does Johnson & Johnson Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Johnson & Johnson insiders own about US$283m worth of shares (which is 0.08% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Johnson & Johnson Tell Us?
The fact that there have been no Johnson & Johnson insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Johnson & Johnson, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Johnson & Johnson. In terms of investment risks, we've identified 1 warning sign with Johnson & Johnson and understanding it should be part of your investment process.