Global

Analyzing the Insider Data for LendingClub (LC)

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

Institutions own 86.97% of LendingClub Corporation (LC)’s shares. The total value of these holdings, in millions, is $1,552. Among active positions in the latest quarter, 90 holders increased their positions by a total of 33.93 million shares, 72 holders decreased the positions by a total of 25.26 million shares, and 45 holders held their positions. This works out to a net increase in ownership of 8.67 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 24 holders initiated new positions by a total of 7.8 million shares and 23 holders exited their positions by a total of 5.43 million shares. This nets out to an increase of 2.37 million shares and is a bullish sign for LC.

In the last three months, insiders executed a total of 13 trades. 2 of these were buys and 11 were sells. Insider ownership decreased by a total of 119716 shares, which suggests that LC’s key executives are feeling less optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: insiders executed 11 buys and 54 sells, and ownership decreased by a net of 8.39 million 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. LendingClub Corporation (NYSE:LC)’s short interest is 32.8 million shares, or % of the float. This represents an increase of 3% 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.

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 LC is a Strong sell, which implies that LC 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 bearish. Technical indicators (also) suggest that LendingClub Corporation (NYSE:LC) is overvalued.

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