Finance

Analyzing the Insider Data for Freeport-McMoRan Inc. (FCX)

Recent insider trends for Freeport-McMoRan Inc. (NYSE:FCX) have caught the attention of investors. Analysts study insider data to get a sense of sense of what key shareholders think about the outlook for a particular stock. In the case of FCX, the data has some interesting implications for where the stock might be headed.

Institutions own 68.15% of Freeport-McMoRan Inc. (FCX)’s shares. The total value of these holdings, in millions, is $13,919. Among active positions in the latest quarter, 325 holders increased their positions by a total of 90.75 million shares, 332 holders decreased the positions by a total of 91.13 million shares, and 115 holders held their positions. This works out to a net decrease in ownership of 378156 shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 100 holders initiated new positions by a total of 18.62 million shares and 66 holders exited their positions by a total of 17.72 million shares. This nets out to an increase of 899868 shares and is a bullish sign for FCX.

In the last three months, insiders executed a total of 4 trades. 4 of these were buys. Insider ownership increased by a total of 41276 shares, which suggests that FCX’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 25 buys and 10 sells, and ownership increased by a net of 183173 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. Freeport-McMoRan Inc. (NYSE:FCX)’s short interest is 36.2 million shares, or 2.71% of the float. This represents an increase of 15% 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 FCX. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that FCX is a Weak sell, which implies that FCX 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 Freeport-McMoRan Inc. (NYSE:FCX) is overvalued.

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