Markets

How Insiders and Institutions are Trading Valeant Pharmaceuticals International, Inc. (VRX)

Recent insider trends for Valeant Pharmaceuticals International, Inc. (NYSE:VRX) 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 VRX might perform in the future.

Institutions own 51.24% of Valeant Pharmaceuticals International, Inc. (VRX)’s shares. The total value of these holdings, in millions, is $2,564. Among active positions in the latest quarter, 161 holders increased their positions by a total of 33.43 million shares, 146 holders decreased the positions by a total of 32.85 million shares, and 70 holders held their positions. This works out to a net increase in ownership of 582641 shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 53 holders initiated new positions by a total of 10.19 million shares and 59 holders exited their positions by a total of 11.88 million shares. This nets out to a decrease of 1.69 million shares and is another bearish sign for VRX.

In the last three months, insiders executed a total of 9 trades. 6 of these were buys and 3 were sells. Insider ownership increased by a total of 964293 shares, which suggests that VRX’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a different story: insiders executed 37 buys and 14 sells, and ownership decreased by a net of 17.13 million shares.



Short interest is another tool that analysts use to gauge investor sentiment. It represents the number of a stock’s shares that are being shorted by investors. Valeant Pharmaceuticals International, Inc. (NYSE:VRX)’s short interest is 38.71 million shares, or 12.57% of the float. This represents a decrease of -3% 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.

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 VRX is a Weak buy, which implies that VRX is expected to outperform 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 Valeant Pharmaceuticals International, Inc. (NYSE:VRX) is undervalued.

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