Finance

Analyzing the Insider Data for Ulta Beauty, Inc. (ULTA)

Recent insider trends for Ulta Beauty, Inc. (NASDAQ:ULTA) have caught the attention of investors. Patters in insider activity can help analysts formulate an outlook for a stock. In the case of ULTA, the data has a lot to say about how the stock might perform going forward.

Institutions own 90.59% of Ulta Beauty, Inc. (ULTA)’s shares. The total value of these holdings, in millions, is $12,076. Among active positions in the latest quarter, 262 holders increased their positions by a total of 10.38 million shares, 324 holders decreased the positions by a total of 7.95 million shares, and 58 holders held their positions. This works out to a net increase in ownership of 2.43 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 86 holders initiated new positions by a total of 4.07 million shares and 103 holders exited their positions by a total of 3.8 million shares. This nets out to an increase of 271170 shares and is a bullish sign for ULTA.

In the last three months, insiders executed a total of 1 trades. 1 of these were buys. Insider ownership increased by a total of 272 shares, which suggests that ULTA’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a different story: insiders executed 20 buys and 21 sells, and ownership decreased by a net of 59773 shares.



The analysis of insider buying and selling trends can be extended to the aggregate level. Short interest, which represents the number of a stock’s shares currently being shorted, captures what the market as a whole feels about a stock. Ulta Beauty, Inc. (NASDAQ:ULTA)’s short interest is 3.25 million shares, or 5.60% of the float. This represents an increase of 16% 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.

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 ULTA. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that ULTA is a sell, which implies that ULTA 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 bullish. Technical indicators (also) suggest that Ulta Beauty, Inc. (NASDAQ:ULTA) is overvalued.

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