Recent insider trends for Merck & Co., Inc. (NYSE:MRK) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. MRK’s insider trading patterns have some implications for where the stock might be headed.
Institutions own 75.12% of Merck & Co., Inc. (MRK)’s shares. The total value of these holdings, in millions, is $114,135. Among active positions in the latest quarter, 860 holders increased their positions by a total of 81.02 million shares, 874 holders decreased the positions by a total of 60.11 million shares, and 255 holders held their positions. This works out to a net increase in ownership of 20.91 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 73 holders initiated new positions by a total of 12.34 million shares and 64 holders exited their positions by a total of 4.34 million shares. This nets out to an increase of 8 million shares and is a bullish sign for MRK.
In the last three months, insiders executed a total of 1 trades.1 were sells. Insider ownership decreased by a total of 5000 shares, which suggests that MRK’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 11 buys and 16 sells, and ownership decreased by a net of 23638 shares.
Short interest, or the number of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment. Merck & Co., Inc. (NYSE:MRK)’s short interest is 20.33 million shares, or % of the float. This represents an increase of 20% 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.
Ownership trends and trading patterns can be useful tools for predicting a stock’s performance, but it’s also important to consider the technicals in order to form a more comprehensive view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that MRK is a Strong sell, which implies that MRK 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 Merck & Co., Inc. (NYSE:MRK) is overvalued.