Recent insider trends for Yamana Gold Inc. (NYSE:AUY) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on AUY is anything to go by, investors should pay attention.
Institutions own 41.66% of Yamana Gold Inc. (AUY)’s shares. The total value of these holdings, in millions, is $988. Among active positions in the latest quarter, 91 holders increased their positions by a total of 26.22 million shares, 102 holders decreased the positions by a total of 42.85 million shares, and 53 holders held their positions. This works out to a net decrease in ownership of 16.63 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 25 holders initiated new positions by a total of 8.4 million shares and 19 holders exited their positions by a total of 1.99 million shares. This nets out to an increase of 6.4 million shares and is a bullish sign for AUY.
Insider ownership increased by a total of 0 shares, which suggests that AUY’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: ownership increased by a net of 0 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. Yamana Gold Inc. (NYSE:AUY)’s short interest is 24.05 million shares, or 2.58% of the float. This represents an increase of 23% 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 AUY. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that AUY is a Strong sell, which implies that AUY 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 bullish. Technical indicators (also) suggest that Yamana Gold Inc. (NYSE:AUY) is overvalued.