Earnings

Analyzing the Insider Data for Opko Health, Inc. (OPK)

Recent insider trends for Opko Health, Inc. (NASDAQ:OPK) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on OPK is anything to go by, investors should pay attention.

Institutions own 23.06% of Opko Health, Inc. (OPK)’s shares. The total value of these holdings, in millions, is $835. Among active positions in the latest quarter, 109 holders increased their positions by a total of 11.19 million shares, 111 holders decreased the positions by a total of 13.83 million shares, and 56 holders held their positions. This works out to a net decrease in ownership of 2.63 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 28 holders initiated new positions by a total of 3.38 million shares and 44 holders exited their positions by a total of 4.46 million shares. This nets out to a decrease of 1.08 million shares and is another bearish sign for OPK.

In the last three months, insiders executed a total of 33 trades. 32 of these were buys and 1 were sells. Insider ownership increased by a total of 840300 shares, which suggests that OPK’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: insiders executed 166 buys and 11 sells, and ownership increased by a net of 3.82 million shares.



The analysis of insider buying and selling trends can be extended to the aggregate level. Short interest, which represents the number of a stock’s shares currently being shorted, captures what the market as a whole feels about a stock. Opko Health, Inc. (NASDAQ:OPK)’s short interest is 77.82 million shares, or 23.19% of the float. This represents an increase of 2% in the number of shares being shorted compared to the previous reading, and implies that investors felt more pessimistic about the stock during the past two weeks.

Insider data can help an investor form an outlook on a stock, but it’s important to supplement this data with other information such as technical indicators to form a more complete view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that OPK is a Strong sell, which implies that OPK is expected to underperform the market based on prior trading patterns.

Conclusion




Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bullish. Technical indicators (also) suggest that Opko Health, Inc. (NASDAQ:OPK) is overvalued.

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