Long-time JP Morgan insider Stephen Burke bought $6.6M of JPM as loan losses mount and the stock slides. It’s the director’s first buy since 2011.


JP Morgan insider Stephen Burke bought 75,000 shares of the nation’s largest bank at $87.99 yesterday in the open market. The disclosure came in a Form 4 filing made after the market closed. The buying increased Burke’s JPM holdings by 50%.

Burke’s open market purchase comes two days after JP Morgan Chase (JPM) posted first-quarter profit that was well below analysts’ expectations, reflecting fallout from the COVIG-19 pandemic which has shut-down much of the global economy.

Burke has been a director at JPM since 2004. He is also the Senior Executive Vice President of Comcast and Chairman of NBCUniversal. He has also been a director at Berkshire Hathaway since 2009.

After the filing, JPM stock was up over 6%, trading around $93 mid-day Friday.

The earnings drop was the result of big additions to the bank’s credit reserves. JPM management expects a surge in defaults across the company’s lending businesses, from credit cards in its consumer division to energy, real estate and retail sector loans in its commercial operations. 

“JPMorgan Chase performed well in what was a very tough and unique operating environment,” CEO Jamie Dimon said in a statement. “In the first quarter, the underlying results of the company were extremely good, however given the likelihood of a fairly severe recession, it was necessary to build credit reserves of $6.8 billion, resulting in total credit costs of $8.3B for the quarter.”

Despite being a director since 2004, JP Morgan insider Stephen Burke’s only previous open-market purchase of JPM was in July of 2011, when he purchased 25,000 shares at $42.18. His only other buying as an insider was Berkshire Hathaway (BRK.A) stock in 2009 and 2010, shortly after becoming a director at Warren Buffett’s company.

JP Morgan insider Stephen Burke’s open market buying history as insider.

Filing DateCompanySymbolTransactionTrade DateShares Avg. Price  Total % Change
16-Apr-2020JPMorgan Chase & CoJPMMarket Purchase16-Apr-202075000                  88  $     6,598,960 50.0%
25-Jul-2011JPMorgan Chase & CoJPMMarket Purchase22-Jul-201125000                  42  $     1,054,420 40.5%
04-May-2010Berkshire Hathaway IncBRK.AMarket Purchase04-May-20106         115,600  $        693,600
30-Dec-2009Berkshire Hathaway IncBRK.AMarket Purchase29-Dec-20095           98,780  $        493,899

CEO Dimon said last week in his annual shareholders’ letter that the bank’s earnings “will be down meaningfully in 2020” from the record profit it posted last year. He also warned investors that if the downturn is “extremely adverse,” and the bank will probably consider suspending its dividend to preserve capital.

Jamie Dimon famously bought $11M of JPM stock in January of 2009 at the height of the financial crisis as the stock plummeted. That insider purchase came at a time of extreme investor pessimism regarding banking stocks. While it didn’t mark the immediate low for the banking sector, Dimon’s buying served to help install confidence in the ravaged sector. JPM hit an all-time-high of $141 in early January of this year — over 500% above his “heroic” insider purchase.

It remains to be seen whether Dimon or other officers and directors will join JP Morgan insider Stephen Burke and add to their holdings.

JP MorganChase (JPM) monthly chart since 2007. Source: Interactive Brokers

You can follow insider buying at the SEC’s Edgar website or at sites like WhaleWisdom.com.

Contact Mark about investing based on SEC filings and smart money disclosures.


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