Finance

Should You Invest in National CineMedia (NCMI)? A Look at the Insider Trends

Recent insider trends for National CineMedia, Inc. (NASDAQ:NCMI) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. NCMI’s insider trading patterns have some implications for where the stock might be headed.

Institutions own 71.58% of National CineMedia, Inc. (NCMI)’s shares. The total value of these holdings, in millions, is $320. Among active positions in the latest quarter, 80 holders increased their positions by a total of 12.48 million shares, 74 holders decreased the positions by a total of 12.07 million shares, and 17 holders held their positions. This works out to a net increase in ownership of 410936 shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 29 holders initiated new positions by a total of 7.84 million shares and 39 holders exited their positions by a total of 8.33 million shares. This nets out to a decrease of 486517 shares and is another bearish sign for NCMI.

In the last three months, insiders executed a total of 4 trades. 2 of these were buys and 2 were sells. Insider ownership increased by a total of 800000 shares, which suggests that NCMI’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 7 buys and 17 sells, and ownership increased by a net of 1.1 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. National CineMedia, Inc. (NASDAQ:NCMI)’s short interest is 3.32 million shares, or 6.53% of the float. This represents a decrease of -7% 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 NCMI. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that NCMI is a sell, which implies that NCMI 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 National CineMedia, Inc. (NASDAQ:NCMI) is overvalued.

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