Finance

Analyzing the Insider Data for Facebook, Inc. (FB)

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

Institutions own 71.81% of Facebook, Inc. (FB)’s shares. The total value of these holdings, in millions, is $295,973. Among active positions in the latest quarter, 981 holders increased their positions by a total of 66.94 million shares, 863 holders decreased the positions by a total of 48.44 million shares, and 229 holders held their positions. This works out to a net increase in ownership of 18.49 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 125 holders initiated new positions by a total of 8.55 million shares and 65 holders exited their positions by a total of 2.87 million shares. This nets out to an increase of 5.68 million shares and is a bullish sign for FB.

In the last three months, insiders executed a total of 85 trades. 28 of these were buys and 57 were sells. Insider ownership increased by a total of 5.67 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 119 buys and 245 sells, and ownership decreased by a net of 13.97 million shares.



Short interest, or the number of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment. Facebook, Inc. (NASDAQ:FB)’s short interest is 21.72 million shares, or 0.94% of the float. This represents an increase of 2% 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.

Ownership trends and trading patterns can be useful tools for predicting a stock’s performance, but it’s also important to consider the technicals in order to form a more comprehensive view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that FB is a Weak 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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