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Are Applied Materials, Inc. (AMAT)’s Recent Ownership and Insider Trends a Sign of Things to Come?

Recent insider trends for Applied Materials, Inc. (NASDAQ:AMAT) 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 AMAT might perform in the future.

Institutions own 80.71% of Applied Materials, Inc. (AMAT)’s shares. The total value of these holdings, in millions, is $48,515. Among active positions in the latest quarter, 414 holders increased their positions by a total of 62.88 million shares, 477 holders decreased the positions by a total of 74.06 million shares, and 139 holders held their positions. This works out to a net decrease in ownership of 11.19 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 113 holders initiated new positions by a total of 10.61 million shares and 56 holders exited their positions by a total of 10.21 million shares. This nets out to an increase of 397521 shares and is a bullish sign for AMAT.

In the last three months, insiders executed a total of 7 trades. 3 of these were buys and 4 were sells. Insider ownership increased by a total of 122689 shares, which suggests that AMAT’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 21 buys and 24 sells, and ownership increased by a net of 724953 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. Applied Materials, Inc. (NASDAQ:AMAT)’s short interest is 10.71 million shares, or % of the float. This represents a decrease of -30% 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.

In light of the insider ownership and trading data it makes sense to consider technicals to see if they come to a similar conclusion about the outlook for AMAT. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that AMAT is a buy, which implies that AMAT 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 Applied Materials, Inc. (NASDAQ:AMAT) is undervalued.

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