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Dissecting the Insider Trading Patterns of Facebook, Inc. (FB)

Recent insider trends for Facebook, Inc. (NASDAQ:FB) 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 FB might perform in the future.

Institutions own 71.05% of Facebook, Inc. (FB)’s shares. The total value of these holdings, in millions, is $302,389. Among active positions in the latest quarter, 1,016 holders increased their positions by a total of 71.7 million shares, 825 holders decreased the positions by a total of 62.84 million shares, and 208 holders held their positions. This works out to a net increase in ownership of 8.86 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 137 holders initiated new positions by a total of 8.38 million shares and 65 holders exited their positions by a total of 4.78 million shares. This nets out to an increase of 3.59 million shares and is a bullish sign for FB.

In the last three months, insiders executed a total of 67 trades. 19 of these were buys and 48 were sells. Insider ownership increased by a total of 3.43 million shares, which suggests that FB’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 122 buys and 257 sells, and ownership decreased by a net of 14.79 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. Facebook, Inc. (NASDAQ:FB)’s short interest is 21.2 million shares, or 0.92% of the float. This represents an increase of 3% 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.

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 FB is a buy, which implies that FB 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 Facebook, Inc. (NASDAQ:FB) is undervalued.

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