Finance

Are Discovery Communications, Inc. (DISCA)’s Recent Ownership and Insider Trends a Sign of Things to Come?

Recent insider trends for Discovery Communications, Inc. (NASDAQ:DISCA) have caught the attention of investors. Patters in insider activity can help analysts formulate an outlook for a stock. In the case of DISCA, the data has a lot to say about how the stock might perform going forward.

Institutions own 114.09% of Discovery Communications, Inc. (DISCA)’s shares. The total value of these holdings, in millions, is $3,513. Among active positions in the latest quarter, 216 holders increased their positions by a total of 14.36 million shares, 189 holders decreased the positions by a total of 11.51 million shares, and 75 holders held their positions. This works out to a net increase in ownership of 2.85 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 40 holders initiated new positions by a total of 2.84 million shares and 45 holders exited their positions by a total of 4.22 million shares. This nets out to a decrease of 1.37 million shares and is another bearish sign for DISCA.

In the last three months, insiders executed a total of 5 trades. 4 of these were buys and 1 were sells. Insider ownership increased by a total of 41997 shares, which suggests that DISCA’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a different story: insiders executed 24 buys and 28 sells, and ownership decreased by a net of 1.23 million shares.



Short interest, or the number of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment. Discovery Communications, Inc. (NASDAQ:DISCA)’s short interest is 36.99 million shares, or 10.14% of the float. This represents a decrease of -1% 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 DISCA. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that DISCA is a Strong sell, which implies that DISCA 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 Discovery Communications, Inc. (NASDAQ:DISCA) is overvalued.

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