Recent insider trends for Rite Aid Corporation (NYSE:RAD) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. RAD’s insider trading patterns have some implications for where the stock might be headed.
Institutions own 51.15% of Rite Aid Corporation (RAD)’s shares. The total value of these holdings, in millions, is $958. Among active positions in the latest quarter, 157 holders increased their positions by a total of 91.26 million shares, 162 holders decreased the positions by a total of 103.3 million shares, and 83 holders held their positions. This works out to a net decrease in ownership of 12.04 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 46 holders initiated new positions by a total of 21.27 million shares and 63 holders exited their positions by a total of 37.44 million shares. This nets out to a decrease of 16.17 million shares and is another bearish sign for RAD.
In the last three months, insiders executed a total of 4 trades. 2 of these were buys and 2 were sells. Insider ownership increased by a total of 1.02 million shares, which suggests that RAD’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 19 buys and 20 sells, and ownership increased by a net of 4.31 million shares.
Short interest is another tool that analysts use to gauge investor sentiment. It represents the number of a stock’s shares that are being shorted by investors. Rite Aid Corporation (NYSE:RAD)’s short interest is 179.56 million shares, or 17.29% of the float. This represents an increase of 6% 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 RAD. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that RAD is a hold, which implies that RAD is expected to perform in line with 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 bullish. Technical indicators (also) suggest that Rite Aid Corporation (NYSE:RAD) is fairly valued.