Recent insider trends for Facebook, Inc. (NASDAQ:FB) 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 FB, the data has some interesting implications for where the stock might be headed.
Institutions own 70.87% of Facebook, Inc. (FB)’s shares. The total value of these holdings, in millions, is $301,161. Among active positions in the latest quarter, 1,198 holders increased their positions by a total of 81.38 million shares, 860 holders decreased the positions by a total of 80.29 million shares, and 217 holders held their positions. This works out to a net increase in ownership of 1.09 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 276 holders initiated new positions by a total of 12.76 million shares and 68 holders exited their positions by a total of 11.16 million shares. This nets out to an increase of 1.6 million shares and is a bullish sign for FB.
In the last three months, insiders executed a total of 38 trades. 13 of these were buys and 25 were sells. Insider ownership decreased by a total of 729371 shares, which suggests that FB’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 107 buys and 221 sells, and ownership decreased by a net of 13.65 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. Facebook, Inc. (NASDAQ:FB)’s short interest is 22.65 million shares, or 0.96% of the float. This represents a decrease of -10% 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.
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 FB. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that FB is a Weak sell, which implies that FB 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 Facebook, Inc. (NASDAQ:FB) is overvalued.