Recent insider trends for Wayfair Inc. (NYSE:W) have caught the attention of investors. Analysts study insider data to get a sense of sense of what key shareholders think about the outlook for a particular stock. In the case of W, the data has some interesting implications for where the stock might be headed.
Institutions own 110.94% of Wayfair Inc. (W)’s shares. The total value of these holdings, in millions, is $5,805. Among active positions in the latest quarter, 135 holders increased their positions by a total of 11.47 million shares, 82 holders decreased the positions by a total of 9.46 million shares, and 15 holders held their positions. This works out to a net increase in ownership of 2.01 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 57 holders initiated new positions by a total of 3.57 million shares and 19 holders exited their positions by a total of 4.71 million shares. This nets out to a decrease of 1.14 million shares and is another bearish sign for W.
In the last three months, insiders executed a total of 111 trades. 36 of these were buys and 75 were sells. Insider ownership decreased by a total of 331980 shares, which suggests that W’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 206 buys and 500 sells, and ownership decreased by a net of 13 million 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. Wayfair Inc. (NYSE:W)’s short interest is 9.2 million shares, or 17.25% of the float. This represents a decrease of -2% 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 W. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that W is a Strong buy, which implies that W 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 Wayfair Inc. (NYSE:W) is undervalued.