Recent insider trends for Zynga Inc. (NASDAQ:ZNGA) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. ZNGA’s insider trading patterns have some implications for where the stock might be headed.
Institutions own 78.97% of Zynga Inc. (ZNGA)’s shares. The total value of these holdings, in millions, is $2,327. Among active positions in the latest quarter, 110 holders increased their positions by a total of 86.66 million shares, 108 holders decreased the positions by a total of 64.14 million shares, and 36 holders held their positions. This works out to a net increase in ownership of 22.52 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 32 holders initiated new positions by a total of 22.48 million shares and 31 holders exited their positions by a total of 6.46 million shares. This nets out to an increase of 16.02 million shares and is a bullish sign for ZNGA.
In the last three months, insiders executed a total of 8 trades.8 were sells. Insider ownership decreased by a total of 425164 shares, which suggests that ZNGA’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 4 buys and 40 sells, and ownership decreased by a net of 20.53 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. Zynga Inc. (NASDAQ:ZNGA)’s short interest is 18.24 million shares, or 2.56% of the float. This represents a decrease of -9% 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 ZNGA. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that ZNGA is a sell, which implies that ZNGA is expected to underperform 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 Zynga Inc. (NASDAQ:ZNGA) is overvalued.