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Jamie Dimon buys 500K of JPM common

According to SEC filings Jamie Dimon just picked up 500K shares of JPMC over the last couple of days.  It appears he did this by selling quite a bit of preferred JPMC stock he and his wife had in several trusts.

Is he signaling that JPMC has finally liquidated the entire bad trade and the remaining downside is limited.  I find it very interesting that he would sell the safer and less volatile preferred shares and convert them to the common which falls lower in the capital structure.  If you look at the JPM price chart it appears to have a trading range of between 30 and 45 over the last two years, since it recovered from the liquidity crisis of 2008.  So if the shares return to their pre-trading loss notification price of 45 he is looking at approximately a 30% gain on the common shares.  So at  the $17 million dollar purchase price he could make $5 million if the price returns to the prior high.

To add to it the stock is now paying a yield of 3.5% at the current price so with his new 500,000 shares he has picked up income of approximately $600K per year while he waits for the price to appreciate.

I do not own any shares of JPM directly.

Looks like JPM is at the low end of valuation.

 

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