Recent insider trends for Cavium, Inc. (NASDAQ:CAVM) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. CAVM’s insider trading patterns have some implications for where the stock might be headed.
Institutions own 107.33% of Cavium, Inc. (CAVM)’s shares. The total value of these holdings, in millions, is $6,235. Among active positions in the latest quarter, 137 holders increased their positions by a total of 11.64 million shares, 127 holders decreased the positions by a total of 6.38 million shares, and 26 holders held their positions. This works out to a net increase in ownership of 5.26 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 39 holders initiated new positions by a total of 3.38 million shares and 53 holders exited their positions by a total of 2.76 million shares. This nets out to an increase of 613600 shares and is a bullish sign for CAVM.
In the last three months, insiders executed a total of 1 trades. 1 were sells. Insider ownership decreased by a total of 15000 shares, which suggests that CAVM’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 15 buys and 15 sells, and ownership decreased by a net of 115440 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. Cavium, Inc. (NASDAQ:CAVM)’s short interest is 5.11 million shares, or 7.78% of the float. This represents a decrease of -8% 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.
In light of the insider ownership and trading data it makes sense to consider technicals to see if they come to a similar conclusion about the outlook for CAVM. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that CAVM is a Strong buy, which implies that CAVM is expected to outperform 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 bearish. Technical indicators (also) suggest that Cavium, Inc. (NASDAQ:CAVM) is undervalued.