Markets

How Insiders and Institutions are Trading Meritor, Inc. (MTOR)

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

Institutions own 93.81% of Meritor, Inc. (MTOR)’s shares. The total value of these holdings, in millions, is $1,716. Among active positions in the latest quarter, 94 holders increased their positions by a total of 8.7 million shares, 79 holders decreased the positions by a total of 8.46 million shares, and 29 holders held their positions. This works out to a net increase in ownership of 236984 shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 30 holders initiated new positions by a total of 3.47 million shares and 26 holders exited their positions by a total of 2.08 million shares. This nets out to an increase of 1.4 million shares and is a bullish sign for MTOR.

In the last three months, insiders executed a total of 9 trades. 8 of these were buys and 1 were sells. Insider ownership increased by a total of 4521 shares, which suggests that MTOR’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 22 buys and 20 sells, and ownership decreased by a net of 664941 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. Meritor, Inc. (NYSE:MTOR)’s short interest is 6.97 million shares, or 8.92% of the float. This represents an increase of 3% 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 MTOR. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that MTOR is a Strong buy, which implies that MTOR 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 bullish. Technical indicators (also) suggest that Meritor, Inc. (NYSE:MTOR) is undervalued.

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