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Are Cisco (CSCO)’s Recent Ownership and Insider Trends a Sign of Things to Come?

Recent insider trends for Cisco Systems, Inc. (NASDAQ:CSCO) have caught the attention of investors. Insider data is useful because it can reveal what a company’s executives and largest shareholders feel about a stock. In this case, the data has some interesting things to say about how CSCO might perform in the future.

Institutions own 76.43% of Cisco Systems, Inc. (CSCO)’s shares. The total value of these holdings, in millions, is $128,636. Among active positions in the latest quarter, 940 holders increased their positions by a total of 145.1 million shares, 880 holders decreased the positions by a total of 159.02 million shares, and 182 holders held their positions. This works out to a net decrease in ownership of 13.92 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 90 holders initiated new positions by a total of 12.73 million shares and 92 holders exited their positions by a total of 13.48 million shares. This nets out to a decrease of 746659 shares and is another bearish sign for CSCO.

In the last three months, insiders executed a total of 31 trades. 17 of these were buys and 14 were sells. Insider ownership increased by a total of 262788 shares, which suggests that CSCO’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 32 buys and 38 sells, and ownership decreased by a net of 728177 shares.



Short interest is another tool that analysts use to gauge investor sentiment. It represents the number of a stock’s shares that are being shorted by investors. Cisco Systems, Inc. (NASDAQ:CSCO)’s short interest is 49.34 million shares, or % of the float. This represents a decrease of -3% 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.

Ownership trends and trading patterns can be useful tools for predicting a stock’s performance, but it’s also important to consider the technicals in order to form a more comprehensive view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that CSCO is a Weak buy, which implies that CSCO is expected to outperform 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 Cisco Systems, Inc. (NASDAQ:CSCO) is undervalued.

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