Finance

What Recent Ownership Trends Suggest About PayPal Holdings, Inc. (PYPL)’s Future Performance

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

Institutions own 81.96% of PayPal Holdings, Inc. (PYPL)’s shares. The total value of these holdings, in millions, is $79,222. Among active positions in the latest quarter, 505 holders increased their positions by a total of 78.18 million shares, 546 holders decreased the positions by a total of 84.38 million shares, and 150 holders held their positions. This works out to a net decrease in ownership of 6.19 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 121 holders initiated new positions by a total of 26.56 million shares and 57 holders exited their positions by a total of 12.72 million shares. This nets out to an increase of 13.84 million shares and is a bullish sign for PYPL.

In the last three months, insiders executed a total of 10 trades. 6 of these were buys and 4 were sells. Insider ownership decreased by a total of 33563 shares, which suggests that PYPL’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 20 buys and 48 sells, and ownership decreased by a net of 718840 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. PayPal Holdings, Inc. (NASDAQ:PYPL)’s short interest is 16.8 million shares, or 1.48% of the float. This represents a decrease of -11% 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.

In light of the insider ownership and trading data it makes sense to consider technicals to see if they come to a similar conclusion about the outlook for PYPL. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that PYPL is a Strong buy, which implies that PYPL 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 PayPal Holdings, Inc. (NASDAQ:PYPL) is undervalued.

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