Finance

Analyzing the Insider Data for CIT Group Inc. (CIT)

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

Institutions own 105.95% of CIT Group Inc. (CIT)’s shares. The total value of these holdings, in millions, is $7,132. Among active positions in the latest quarter, 143 holders increased their positions by a total of 7.77 million shares, 140 holders decreased the positions by a total of 15.06 million shares, and 53 holders held their positions. This works out to a net decrease in ownership of 7.28 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 56 holders initiated new positions by a total of 2.74 million shares and 29 holders exited their positions by a total of 1.96 million shares. This nets out to an increase of 779919 shares and is a bullish sign for CIT.

In the last three months, insiders executed a total of 7 trades. 1 of these were buys and 6 were sells. Insider ownership decreased by a total of 5467 shares, which suggests that CIT’s key executives are feeling less optimistic about the outlook for the stock. The data from the past twelve months tells a different story: insiders executed 26 buys and 52 sells, and ownership increased by a net of 75088 shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. CIT Group Inc. (NYSE:CIT)’s short interest is 4.48 million shares, or 3.43% of the float. This represents a decrease of -16% 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.

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 CIT. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that CIT is a Strong buy, which implies that CIT 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 CIT Group Inc. (NYSE:CIT) is undervalued.

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