Recent insider trends for SeaDrill Limited (NYSE:SDRL) 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 SDRL, the data has some interesting implications for where the stock might be headed.
Institutions own 21.91% of SeaDrill Limited (SDRL)’s shares. The total value of these holdings, in millions, is $34. Among active positions in the latest quarter, 66 holders increased their positions by a total of 25.13 million shares, 125 holders decreased the positions by a total of 56.94 million shares, and 53 holders held their positions. This works out to a net decrease in ownership of 31.81 million shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 31 holders initiated new positions by a total of 5.01 million shares and 61 holders exited their positions by a total of 13.63 million shares. This nets out to a decrease of 8.62 million shares and is another bearish sign for SDRL.
Insider ownership increased by a total of 0 shares, which suggests that SDRL’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: ownership increased by a net of 0 shares.
Analysts often look at short interest, or the number of shares currently being shorted by investors, to aid in their outlook for a particular stock. SeaDrill Limited (NYSE:SDRL)’s short interest is 26.12 million shares, or 7.45% of the float. This represents a decrease of -50% 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.
Insider data can help an investor form an outlook on a stock, but it’s important to supplement this data with other information such as technical indicators to form a more complete view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that SDRL is a sell, which implies that SDRL 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 SeaDrill Limited (NYSE:SDRL) is overvalued.