Finance

Dissecting the Insider Trading Patterns of Cleveland-Cliffs Inc. (CLF)

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

Institutions own 56.81% of Cleveland-Cliffs Inc. (CLF)’s shares. The total value of these holdings, in millions, is $1,019. Among active positions in the latest quarter, 127 holders increased their positions by a total of 26.47 million shares, 129 holders decreased the positions by a total of 30.7 million shares, and 35 holders held their positions. This works out to a net decrease in ownership of 4.23 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 43 holders initiated new positions by a total of 6.73 million shares and 50 holders exited their positions by a total of 12.23 million shares. This nets out to a decrease of 5.5 million shares and is another bearish sign for CLF.

In the last three months, insiders executed a total of 6 trades. 5 of these were buys and 1 were sells. Insider ownership increased by a total of 106739 shares, which suggests that CLF’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 5 buys and 1 sells, and ownership increased by a net of 106739 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. Cleveland-Cliffs Inc. (NYSE:CLF)’s short interest is 43.84 million shares, or 18.91% of the float. This represents an increase of 12% 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 CLF. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that CLF is a Strong sell, which implies that CLF 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 Cleveland-Cliffs Inc. (NYSE:CLF) is overvalued.

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