Finance

Analyzing the Insider Data for Rite Aid Corporation (RAD)

Recent insider trends for Rite Aid Corporation (NYSE:RAD) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. RAD’s insider trading patterns have some implications for where the stock might be headed.

Institutions own 52.41% of Rite Aid Corporation (RAD)’s shares. The total value of these holdings, in millions, is $993. Among active positions in the latest quarter, 162 holders increased their positions by a total of 108.91 million shares, 220 holders decreased the positions by a total of 174.18 million shares, and 78 holders held their positions. This works out to a net decrease in ownership of 65.27 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 50 holders initiated new positions by a total of 23.37 million shares and 103 holders exited their positions by a total of 79.84 million shares. This nets out to a decrease of 56.47 million shares and is another bearish sign for RAD.

In the last three months, insiders executed a total of 22 trades. 18 of these were buys and 4 were sells. Insider ownership increased by a total of 4.35 million shares, which suggests that RAD’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 18 buys and 20 sells, and ownership increased by a net of 4.24 million shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. Rite Aid Corporation (NYSE:RAD)’s short interest is 139.72 million shares, or 13.46% of the float. This represents an increase of 13% 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.

Supplementing insider data with technical indicators can help an investor form a more complete view on the outlook for a stock. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that RAD is a Strong sell, which implies that RAD 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 Rite Aid Corporation (NYSE:RAD) is overvalued.

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