Recent insider trends for Valeant Pharmaceuticals International, Inc. (NYSE:VRX) have caught the attention of investors. Analysts study insider data to get a sense of sense of what key shareholders think about the outlook for a particular stock. In the case of VRX, the data has some interesting implications for where the stock might be headed.
Institutions own 50.30% of Valeant Pharmaceuticals International, Inc. (VRX)’s shares. The total value of these holdings, in millions, is $3,112. Among active positions in the latest quarter, 125 holders increased their positions by a total of 25.39 million shares, 141 holders decreased the positions by a total of 28.15 million shares, and 80 holders held their positions. This works out to a net decrease in ownership of 2.75 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 30 holders initiated new positions by a total of 2.44 million shares and 54 holders exited their positions by a total of 6.95 million shares. This nets out to a decrease of 4.51 million shares and is another bearish sign for VRX.
In the last three months, insiders executed a total of 7 trades. 6 of these were buys and 1 were sells. Insider ownership increased by a total of 18836 shares, which suggests that VRX’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a different story: insiders executed 39 buys and 11 sells, and ownership decreased by a net of 17.07 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. Valeant Pharmaceuticals International, Inc. (NYSE:VRX)’s short interest is 40.9 million shares, or 13.27% 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.
In light of the insider ownership and trading data it makes sense to consider technicals to see if they come to a similar conclusion about the outlook for VRX. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that VRX is a buy, which implies that VRX 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 bullish. Technical indicators (also) suggest that Valeant Pharmaceuticals International, Inc. (NYSE:VRX) is undervalued.