Insider Activity: JP Morgan Chase (JPM)

Director makes $1.99 million buy.

Mellody Hobson, a director at JP Morgan Chase (JPM), picked up 16,000 shares recently, increasing her stake in the company by 15 percent. At current prices, the buy came to $1.994 million, and leaves the director with just over 117,000 shares.

Insider data shows that the banking behemoth has had a mix of insiders both buying and selling in the past few years, which is typical of big companies that pay executives in stock options.

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  • Shares of the company trade under 13 times earnings, and the company has expanded its dividend payout for a 2.9 percent yield at present, all while outperforming the market by 8 points in the past year.

    Action to take: Among the largest five mega-banks, it’s tough to find a better run company than JP Morgan Chase under CEO Jamie Dimon. It’s a worthwhile holding for anyone interested in the banking sector, and the company’s continued growth in a potentially slowing economy is likely to continue. Shares are a buy up to $130.00.

    Traders may want to bet on the continued trend higher with a call option trade. The June 2020 $130 calls, at just $6.40 or $640 per option contract, are a cheaper way to control 100 shares without ownership. A continued move higher in shares could give a high-double digit return in the next few months, possibly into a triple-digit return, without too much risk.