Finance

What the Insider Data Suggests About eBay Inc. (EBAY)

Recent insider trends for eBay Inc. (NASDAQ:EBAY) 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 EBAY might perform in the future.

Institutions own 87.01% of eBay Inc. (EBAY)’s shares. The total value of these holdings, in millions, is $32,576. Among active positions in the latest quarter, 299 holders increased their positions by a total of 58.91 million shares, 433 holders decreased the positions by a total of 70.67 million shares, and 139 holders held their positions. This works out to a net decrease in ownership of 11.76 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 62 holders initiated new positions by a total of 12.51 million shares and 56 holders exited their positions by a total of 12.02 million shares. This nets out to an increase of 492130 shares and is a bullish sign for EBAY.

In the last three months, insiders executed a total of 21 trades. 4 of these were buys and 17 were sells. Insider ownership decreased by a total of 381224 shares, which suggests that EBAY’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 16 buys and 85 sells, and ownership decreased by a net of 11.03 million 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. eBay Inc. (NASDAQ:EBAY)’s short interest is 25.49 million shares, or 2.51% of the float. This represents an increase of 14% 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 EBAY. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that EBAY is a sell, which implies that EBAY 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 eBay Inc. (NASDAQ:EBAY) is overvalued.

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