Earnings

Are Investors Buying or Selling Nutanix, Inc. (NTNX), and What Should You Do?

Recent insider trends for Nutanix, Inc. (NASDAQ:NTNX) have caught the attention of investors. Insider data is useful because it can reveal what a company’s executives and largest shareholders feel about a stock. In this case, the data has some interesting things to say about how NTNX might perform in the future.

Institutions own 60.88% of Nutanix, Inc. (NTNX)’s shares. The total value of these holdings, in millions, is $1,111. Among active positions in the latest quarter, 121 holders increased their positions by a total of 25.83 million shares, 47 holders decreased the positions by a total of 4.58 million shares, and 6 holders held their positions. This works out to a net increase in ownership of 21.25 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 61 holders initiated new positions by a total of 7.8 million shares and 30 holders exited their positions by a total of 3 million shares. This nets out to an increase of 4.8 million shares and is a bullish sign for NTNX.

In the last three months, insiders executed a total of 28 trades. 5 of these were buys and 23 were sells. Insider ownership decreased by a total of 214164 shares, which suggests that NTNX’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 40 buys and 82 sells, and ownership decreased by a net of 7.69 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. Nutanix, Inc. (NASDAQ:NTNX)’s short interest is 15.35 million shares, or 43.19% of the float. This represents an increase of 9% 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 NTNX is a buy, which implies that NTNX 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 Nutanix, Inc. (NASDAQ:NTNX) is undervalued.

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