Finance

What Recent Ownership Trends Suggest About Lowe’s Companies, Inc. (LOW)’s Future Performance

Recent insider trends for Lowe’s Companies, Inc. (NYSE:LOW) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on LOW is anything to go by, investors should pay attention.

Institutions own 75.00% of Lowe’s Companies, Inc. (LOW)’s shares. The total value of these holdings, in millions, is $53,269. Among active positions in the latest quarter, 610 holders increased their positions by a total of 61.84 million shares, 601 holders decreased the positions by a total of 74.06 million shares, and 159 holders held their positions. This works out to a net decrease in ownership of 12.23 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 105 holders initiated new positions by a total of 11.32 million shares and 88 holders exited their positions by a total of 14.18 million shares. This nets out to a decrease of 2.86 million shares and is another bearish sign for LOW.

In the last three months, insiders executed a total of 12 trades. 12 were sells. Insider ownership decreased by a total of 61543 shares, which suggests that LOW’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 10 buys and 32 sells, and ownership decreased by a net of 657090 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. Lowe’s Companies, Inc. (NYSE:LOW)’s short interest is 8.33 million shares, or % of the float. This represents an increase of 14% 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.

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 LOW is a Strong buy, which implies that LOW 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 Lowe’s Companies, Inc. (NYSE:LOW) is undervalued.

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