Finance

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

Recent insider trends for Sage Therapeutics, Inc. (NASDAQ:SAGE) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. SAGE’s insider trading patterns have some implications for where the stock might be headed.

Institutions own 96.10% of Sage Therapeutics, Inc. (SAGE)’s shares. The total value of these holdings, in millions, is $6,602. Among active positions in the latest quarter, 100 holders increased their positions by a total of 4.25 million shares, 89 holders decreased the positions by a total of 3.22 million shares, and 25 holders held their positions. This works out to a net increase in ownership of 1.03 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 26 holders initiated new positions by a total of 476000 shares and 37 holders exited their positions by a total of 764940 shares. This nets out to a decrease of 288940 shares and is another bearish sign for SAGE.

In the last three months, insiders executed a total of 1 trades. 1 were sells. Insider ownership decreased by a total of 545000 shares, which suggests that SAGE’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 1 buys and 6 sells, and ownership decreased by a net of 2.35 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. Sage Therapeutics, Inc. (NASDAQ:SAGE)’s short interest is 3.22 million shares, or 9.53% of the float. This represents an increase of 1% 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 SAGE. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that SAGE is a Strong buy, which implies that SAGE 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 Sage Therapeutics, Inc. (NASDAQ:SAGE) is undervalued.

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