Finance

Analyzing the Insider Data for Chesapeake Energy Corporation (CHK)

Recent insider trends for Chesapeake Energy Corporation (NYSE:CHK) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on CHK is anything to go by, investors should pay attention.

Institutions own 64.99% of Chesapeake Energy Corporation (CHK)’s shares. The total value of these holdings, in millions, is $2,315. Among active positions in the latest quarter, 212 holders increased their positions by a total of 50.44 million shares, 192 holders decreased the positions by a total of 55.04 million shares, and 87 holders held their positions. This works out to a net decrease in ownership of 4.6 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 47 holders initiated new positions by a total of 5.13 million shares and 67 holders exited their positions by a total of 17.05 million shares. This nets out to a decrease of 11.92 million shares and is another bearish sign for CHK.

In the last three months, insiders executed a total of 4 trades. 3 of these were buys and 1 were sells. Insider ownership increased by a total of 31187 shares, which suggests that CHK’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 30 buys and 15 sells, and ownership increased by a net of 2.24 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. Chesapeake Energy Corporation (NYSE:CHK)’s short interest is 167.39 million shares, or 19.06% of the float. This represents a decrease of -3% 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 CHK is a Strong sell, which implies that CHK 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 Chesapeake Energy Corporation (NYSE:CHK) is overvalued.

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