Recent insider trends for Wells Fargo & Company (NYSE:WFC) 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 WFC might perform in the future.
Institutions own 77.14% of Wells Fargo & Company (WFC)’s shares. The total value of these holdings, in millions, is $204,410. Among active positions in the latest quarter, 777 holders increased their positions by a total of 148.33 million shares, 1,002 holders decreased the positions by a total of 180.62 million shares, and 221 holders held their positions. This works out to a net decrease in ownership of 32.29 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 99 holders initiated new positions by a total of 36.85 million shares and 96 holders exited their positions by a total of 24.99 million shares. This nets out to an increase of 11.86 million shares and is a bullish sign for WFC.
In the last three months, insiders executed a total of 1 trades. 1 of these were buys. Insider ownership increased by a total of 2355 shares, which suggests that WFC’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 28 buys and 64 sells, and ownership decreased by a net of 8.08 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. Wells Fargo & Company (NYSE:WFC)’s short interest is 30.33 million shares, or 0.68% of the float. This represents an increase of 7% 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.
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 WFC. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that WFC is a Weak sell, which implies that WFC 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 Wells Fargo & Company (NYSE:WFC) is overvalued.