Finance

How Insiders and Institutions are Trading eBay Inc. (EBAY)

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

Institutions own 86.99% of eBay Inc. (EBAY)’s shares. The total value of these holdings, in millions, is $33,449. Among active positions in the latest quarter, 298 holders increased their positions by a total of 58.66 million shares, 432 holders decreased the positions by a total of 70.68 million shares, and 139 holders held their positions. This works out to a net decrease in ownership of 12.02 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 61 holders initiated new positions by a total of 12.38 million shares and 56 holders exited their positions by a total of 12.02 million shares. This nets out to an increase of 359487 shares and is a bullish sign for EBAY.

In the last three months, insiders executed a total of 22 trades. 4 of these were buys and 18 were sells. Insider ownership decreased by a total of 387884 shares, which suggests that EBAY’s key executives are feeling less optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: insiders executed 16 buys and 86 sells, and ownership decreased by a net of 11.04 million shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. eBay Inc. (NASDAQ:EBAY)’s short interest is 25.49 million shares, or 2.51% of the float. This represents an increase of 14% 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.

Insider data can help an investor form an outlook on a stock, but it’s important to supplement this data with other information such as technical indicators to form a more complete view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that EBAY is a Weak buy, which implies that EBAY 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 bearish. Technical indicators (also) suggest that eBay Inc. (NASDAQ:EBAY) is undervalued.

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