Recent insider trends for Wal-Mart Stores, Inc. (NYSE:WMT) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. WMT’s insider trading patterns have some implications for where the stock might be headed.
Institutions own 30.76% of Wal-Mart Stores, Inc. (WMT)’s shares. The total value of these holdings, in millions, is $89,132. Among active positions in the latest quarter, 717 holders increased their positions by a total of 53.41 million shares, 722 holders decreased the positions by a total of 43.9 million shares, and 205 holders held their positions. This works out to a net increase in ownership of 9.51 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 101 holders initiated new positions by a total of 10.84 million shares and 84 holders exited their positions by a total of 6.8 million shares. This nets out to an increase of 4.04 million shares and is a bullish sign for WMT.
In the last three months, insiders executed a total of 56 trades. 6 of these were buys and 50 were sells. Insider ownership decreased by a total of 46.62 million shares, which suggests that WMT’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 57 buys and 200 sells, and ownership decreased by a net of 195.36 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. Wal-Mart Stores, Inc. (NYSE:WMT)’s short interest is 44.06 million shares, or 3.03% of the float. This represents an increase of % in the number of shares being shorted compared to the previous reading, and implies that investors felt less 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 WMT. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that WMT is a Strong buy, which implies that WMT 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 Wal-Mart Stores, Inc. (NYSE:WMT) is undervalued.