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Should You Invest in Rite Aid Corporation (RAD)? A Look at the Insider Trends

Recent insider trends for Rite Aid Corporation (NYSE:RAD) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. RAD’s insider trading patterns have some implications for where the stock might be headed.

Institutions own 52.46% of Rite Aid Corporation (RAD)’s shares. The total value of these holdings, in millions, is $876. Among active positions in the latest quarter, 162 holders increased their positions by a total of 105.68 million shares, 184 holders decreased the positions by a total of 145.31 million shares, and 84 holders held their positions. This works out to a net decrease in ownership of 39.63 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 53 holders initiated new positions by a total of 24.24 million shares and 75 holders exited their positions by a total of 61.63 million shares. This nets out to a decrease of 37.38 million shares and is another bearish sign for RAD.

In the last three months, insiders executed a total of 6 trades. 3 of these were buys and 3 were sells. Insider ownership increased by a total of 1.39 million shares, which suggests that RAD’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 19 buys and 20 sells, and ownership increased by a net of 4.31 million shares.



Analysts often look at short interest, or the number of shares currently being shorted by investors, to aid in their outlook for a particular stock. Rite Aid Corporation (NYSE:RAD)’s short interest is 169.33 million shares, or 16.31% 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.

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 RAD. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that RAD is a Strong sell, which implies that RAD is expected to underperform 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 Rite Aid Corporation (NYSE:RAD) is overvalued.

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