Recent insider trends for Caterpillar Inc. (NYSE:CAT) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. CAT’s insider trading patterns have some implications for where the stock might be headed.
Institutions own 68.94% of Caterpillar Inc. (CAT)’s shares. The total value of these holdings, in millions, is $69,045. Among active positions in the latest quarter, 575 holders increased their positions by a total of 23.29 million shares, 532 holders decreased the positions by a total of 23.51 million shares, and 218 holders held their positions. This works out to a net decrease in ownership of 220555 shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 136 holders initiated new positions by a total of 3.04 million shares and 43 holders exited their positions by a total of 1.84 million shares. This nets out to an increase of 1.2 million shares and is a bullish sign for CAT.
In the last three months, insiders executed a total of 7 trades. 7 were sells. Insider ownership decreased by a total of 70637 shares, which suggests that CAT’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 17 buys and 22 sells, and ownership decreased by a net of 326028 shares.
Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. Caterpillar Inc. (NYSE:CAT)’s short interest is 12.62 million shares, or 2.16% of the float. This represents an increase of 11% 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.
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 CAT is a buy, which implies that CAT is expected to outperform the market based on prior trading patterns.
Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bearish. Technical indicators (also) suggest that Caterpillar Inc. (NYSE:CAT) is undervalued.