Recent insider trends for NIKE, Inc. (NYSE:NKE) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. NKE’s insider trading patterns have some implications for where the stock might be headed.
Institutions own 80.24% of NIKE, Inc. (NKE)’s shares. The total value of these holdings, in millions, is $63,614. Among active positions in the latest quarter, 538 holders increased their positions by a total of 57.18 million shares, 688 holders decreased the positions by a total of 64.9 million shares, and 168 holders held their positions. This works out to a net decrease in ownership of 7.72 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 67 holders initiated new positions by a total of 4.54 million shares and 109 holders exited their positions by a total of 10.84 million shares. This nets out to a decrease of 6.29 million shares and is another bearish sign for NKE.
In the last three months, insiders executed a total of 13 trades. 11 of these were buys and 2 were sells. Insider ownership decreased by a total of 116867 shares, which suggests that NKE’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 18 buys and 53 sells, and ownership decreased by a net of 4.2 million 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. NIKE, Inc. (NYSE:NKE)’s short interest is 36.38 million shares, or 2.81% of the float. This represents an increase of 11% 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 NKE is a Strong buy, which implies that NKE is expected to outperform the market based on prior trading patterns.
Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bearish. Technical indicators (also) suggest that NIKE, Inc. (NYSE:NKE) is undervalued.