Global

Analyzing the Insider Data for Snap Inc. (SNAP)

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

Institutions own 27.12% of Snap Inc. (SNAP)’s shares. The total value of these holdings, in millions, is $2,902. Among active positions in the latest quarter, 166 holders increased their positions by a total of 79.61 million shares, 95 holders decreased the positions by a total of 19.88 million shares, and 63 holders held their positions. This works out to a net increase in ownership of 59.73 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 74 holders initiated new positions by a total of 15.73 million shares and 55 holders exited their positions by a total of 13.42 million shares. This nets out to an increase of 2.31 million shares and is a bullish sign for SNAP.

In the last three months, insiders executed a total of 21 trades. 10 of these were buys and 11 were sells. Insider ownership increased by a total of 699560 shares, which suggests that SNAP’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 14 buys and 26 sells, and ownership decreased by a net of 51.15 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. Snap Inc. (NYSE:SNAP)’s short interest is 114.87 million shares, or % of the float. This represents a decrease of -5% 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.

Insider data can help an investor form an outlook on a stock, but it’s important to supplement this data with other information such as technical indicators to form a more complete view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that SNAP is a Strong sell, which implies that SNAP 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 bullish. Technical indicators (also) suggest that Snap Inc. (NYSE:SNAP) is overvalued.

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