Recent insider trends for Coty Inc. (NYSE:COTY) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on COTY is anything to go by, investors should pay attention.
Institutions own 66.83% of Coty Inc. (COTY)’s shares. The total value of these holdings, in millions, is $8,591. Among active positions in the latest quarter, 185 holders increased their positions by a total of 38.82 million shares, 166 holders decreased the positions by a total of 36.39 million shares, and 41 holders held their positions. This works out to a net increase in ownership of 2.43 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 54 holders initiated new positions by a total of 17.65 million shares and 44 holders exited their positions by a total of 10.02 million shares. This nets out to an increase of 7.63 million shares and is a bullish sign for COTY.
In the last three months, insiders executed a total of 15 trades. 14 of these were buys and 1 were sells. Insider ownership increased by a total of 3.01 million shares, which suggests that COTY’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 40 buys and 5 sells, and ownership increased by a net of 269.63 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. Coty Inc. (NYSE:COTY)’s short interest is 59.99 million shares, or 13.34% of the float. This represents an increase of 34% 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 COTY is a Weak sell, which implies that COTY is expected to underperform the market based on prior trading patterns.
Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bullish. Technical indicators (also) suggest that Coty Inc. (NYSE:COTY) is overvalued.