Recent insider trends for Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) 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 ERIC might perform in the future.
Institutions own 08.63% of Telefonaktiebolaget LM Ericsson (publ) (ERIC)’s shares. The total value of these holdings, in millions, is $1,485. Among active positions in the latest quarter, 86 holders increased their positions by a total of 30.54 million shares, 104 holders decreased the positions by a total of 33.58 million shares, and 46 holders held their positions. This works out to a net decrease in ownership of 3.04 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 26 holders initiated new positions by a total of 5.61 million shares and 39 holders exited their positions by a total of 16.43 million shares. This nets out to a decrease of 10.82 million shares and is another bearish sign for ERIC.
Insider ownership increased by a total of 0 shares, which suggests that ERIC’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: and ownership increased by a net of 0 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. Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC)’s short interest is 22.22 million shares, or 0.72% of the float. This represents a decrease of -8% 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.
Supplementing insider data with technical indicators can help an investor form a more complete view on the outlook for a stock. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that ERIC is a sell, which implies that ERIC 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 Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) is overvalued.