Recent insider trends for The Finish Line, Inc. (NASDAQ:FINL) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on FINL is anything to go by, investors should pay attention.
Institutions own 105.22% of The Finish Line, Inc. (FINL)’s shares. The total value of these holdings, in millions, is $417. Among active positions in the latest quarter, 97 holders increased their positions by a total of 5.64 million shares, 97 holders decreased the positions by a total of 7.88 million shares, and 19 holders held their positions. This works out to a net decrease in ownership of 2.24 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 27 holders initiated new positions by a total of 1.47 million shares and 36 holders exited their positions by a total of 2.98 million shares. This nets out to a decrease of 1.51 million shares and is another bearish sign for FINL.
In the last three months, insiders executed a total of 9 trades. 6 of these were buys and 3 were sells. Insider ownership increased by a total of 25029 shares, which suggests that FINL’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: insiders executed 13 buys and 15 sells, and ownership increased by a net of 110588 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. The Finish Line, Inc. (NASDAQ:FINL)’s short interest is 11.76 million shares, or 29.44% 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.
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 FINL. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that FINL is a sell, which implies that FINL is expected to underperform 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 bullish. Technical indicators (also) suggest that The Finish Line, Inc. (NASDAQ:FINL) is overvalued.