Recent insider trends for Ares Capital Corporation (NASDAQ:ARCC) have caught the attention of investors. Insider data is useful because it can reveal what a company’s executives and largest shareholders feel about a stock. In this case, the data has some interesting things to say about how ARCC might perform in the future.
Institutions own 46.04% of Ares Capital Corporation (ARCC)’s shares. The total value of these holdings, in millions, is $3,152. Among active positions in the latest quarter, 209 holders increased their positions by a total of 21.9 million shares, 176 holders decreased the positions by a total of 34.17 million shares, and 80 holders held their positions. This works out to a net decrease in ownership of 12.27 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 41 holders initiated new positions by a total of 4.36 million shares and 45 holders exited their positions by a total of 10.42 million shares. This nets out to a decrease of 6.06 million shares and is another bearish sign for ARCC.
In the last three months, insiders executed a total of 3 trades. 3 of these were buys and 0 were sells. Insider ownership increased by a total of 600 shares, which suggests that ARCC’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 9 buys and 0 sells, and ownership increased by a net of 9100 shares.
Analysts often look at short interest, or the number of shares currently being shorted by investors, to aid in their outlook for a particular stock. Ares Capital Corporation (NASDAQ:ARCC)’s short interest is 4.97 million shares, or % of the float. This represents a decrease of -6% in the number of shares being shorted compared to the previous reading, and implies that investors felt less pessimistic about the stock during the past two weeks.
Given what the insider ownership patterns are saying, it makes sense to consider the technicals to see if these pieces of information reach the same conclusion about the outlook for ARCC. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that ARCC is a Strong sell, which implies that ARCC 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 Ares Capital Corporation (NASDAQ:ARCC) is overvalued.