Finance

Should You Invest in Alibaba Group Holding Limited (BABA)? A Look at the Insider Trends

Recent insider trends for Alibaba Group Holding Limited (NYSE:BABA) 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 BABA, the data has some interesting implications for where the stock might be headed.

Institutions own 37.23% of Alibaba Group Holding Limited (BABA)’s shares. The total value of these holdings, in millions, is $170,898. Among active positions in the latest quarter, 666 holders increased their positions by a total of 81.19 million shares, 459 holders decreased the positions by a total of 88.2 million shares, and 125 holders held their positions. This works out to a net decrease in ownership of 7.02 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 202 holders initiated new positions by a total of 5.98 million shares and 62 holders exited their positions by a total of 41.16 million shares. This nets out to a decrease of 35.18 million shares and is another bearish sign for BABA.

Insider ownership increased by a total of 0 shares, which suggests that BABA’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: and ownership increased by a net of 0 shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. Alibaba Group Holding Limited (NYSE:BABA)’s short interest is 125.73 million shares, or 10.31% 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.

Ownership trends and trading patterns can be useful tools for predicting a stock’s performance, but it’s also important to consider the technicals in order to form a more comprehensive view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that BABA is a Weak buy, which implies that BABA 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 bullish. Technical indicators (also) suggest that Alibaba Group Holding Limited (NYSE:BABA) is undervalued.

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