Finance

Are Meritor, Inc. (MTOR)’s Recent Ownership and Insider Trends a Sign of Things to Come?

Recent insider trends for Meritor, Inc. (NYSE:MTOR) 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 MTOR might perform in the future.

Institutions own 96.75% of Meritor, Inc. (MTOR)’s shares. The total value of these holdings, in millions, is $2,046. Among active positions in the latest quarter, 131 holders increased their positions by a total of 16.53 million shares, 77 holders decreased the positions by a total of 13.68 million shares, and 31 holders held their positions. This works out to a net increase in ownership of 2.85 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 63 holders initiated new positions by a total of 9.91 million shares and 18 holders exited their positions by a total of 2.13 million shares. This nets out to an increase of 7.78 million shares and is a bullish sign for MTOR.

In the last three months, insiders executed a total of 2 trades. 2 of these were buys. Insider ownership increased by a total of 2258 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 23 buys and 21 sells, and ownership decreased by a net of 674118 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. Meritor, Inc. (NYSE:MTOR)’s short interest is 6.61 million shares, or 8.45% of the float. This represents a decrease of -14% 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.

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 MTOR is a Weak sell, which implies that MTOR 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 Meritor, Inc. (NYSE:MTOR) is overvalued.

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