Finance

How Insiders and Institutions are Trading Netflix, Inc. (NFLX)

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

Institutions own 83.54% of Netflix, Inc. (NFLX)’s shares. The total value of these holdings, in millions, is $76,824. Among active positions in the latest quarter, 421 holders increased their positions by a total of 28 million shares, 402 holders decreased the positions by a total of 17.34 million shares, and 150 holders held their positions. This works out to a net increase in ownership of 10.66 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 125 holders initiated new positions by a total of 6.4 million shares and 59 holders exited their positions by a total of 1.52 million shares. This nets out to an increase of 4.87 million shares and is a bullish sign for NFLX.

In the last three months, insiders executed a total of 37 trades. 2 of these were buys and 35 were sells. Insider ownership decreased by a total of 1.13 million shares, which suggests that NFLX’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 2 buys and 114 sells, and ownership decreased by a net of 2.4 million shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. Netflix, Inc. (NASDAQ:NFLX)’s short interest is 21.9 million shares, or 5.17% of the float. This represents a decrease of -13% 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 NFLX is a Strong buy, which implies that NFLX 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 Netflix, Inc. (NASDAQ:NFLX) is undervalued.

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