Finance

What the Insider Data Suggests About Sears Holdings Corporation (SHLD)

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

Institutions own 62.59% of Sears Holdings Corporation (SHLD)’s shares. The total value of these holdings, in millions, is $440. Among active positions in the latest quarter, 37 holders increased their positions by a total of 1.61 million shares, 58 holders decreased the positions by a total of 4.9 million shares, and 34 holders held their positions. This works out to a net decrease in ownership of 3.29 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 13 holders initiated new positions by a total of 286383 shares and 22 holders exited their positions by a total of 930160 shares. This nets out to a decrease of 643777 shares and is another bearish sign for SHLD.

In the last three months, insiders executed a total of 6 trades. 4 of these were buys and 2 were sells. Insider ownership decreased by a total of 1.07 million shares, which suggests that SHLD’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 29 buys and 9 sells, and ownership decreased by a net of 422909 shares.



Short interest is another tool that analysts use to gauge investor sentiment. It represents the number of a stock’s shares that are being shorted by investors. Sears Holdings Corporation (NASDAQ:SHLD)’s short interest is 12.97 million shares, or 61.37% of the float. This represents an increase of 2% 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 SHLD is a Strong sell, which implies that SHLD is expected to underperform 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 Sears Holdings Corporation (NASDAQ:SHLD) is overvalued.

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