Finance

What do Insider Trends Have to Say About Bank of America Corporation (BAC)?

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

Institutions own 69.89% of Bank of America Corporation (BAC)’s shares. The total value of these holdings, in millions, is $210,906. Among active positions in the latest quarter, 825 holders increased their positions by a total of 940.89 million shares, 814 holders decreased the positions by a total of 283.61 million shares, and 220 holders held their positions. This works out to a net increase in ownership of 657.28 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 107 holders initiated new positions by a total of 760.92 million shares and 75 holders exited their positions by a total of 31.84 million shares. This nets out to an increase of 729.08 million shares and is a bullish sign for BAC.

In the last three months, insiders executed a total of 3 trades.3 were sells. Insider ownership decreased by a total of 59575 shares, which suggests that BAC’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 7 buys and 52 sells, and ownership decreased by a net of 2.15 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. Bank of America Corporation (NYSE:BAC)’s short interest is 121.67 million shares, or 1.16% of the float. This represents a decrease of -5% 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.

Supplementing insider data with technical indicators can help an investor form a more complete view on the outlook for a stock. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that BAC is a Strong buy, which implies that BAC 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 Bank of America Corporation (NYSE:BAC) is undervalued.

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