Finance

Analyzing the Insider Data for Zynga Inc. (ZNGA)

Recent insider trends for Zynga Inc. (NASDAQ:ZNGA) 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 ZNGA, the data has some interesting implications for where the stock might be headed.

Institutions own 78.97% of Zynga Inc. (ZNGA)’s shares. The total value of these holdings, in millions, is $2,445. Among active positions in the latest quarter, 110 holders increased their positions by a total of 86.66 million shares, 108 holders decreased the positions by a total of 64.14 million shares, and 36 holders held their positions. This works out to a net increase in ownership of 22.52 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 32 holders initiated new positions by a total of 22.48 million shares and 31 holders exited their positions by a total of 6.46 million shares. This nets out to an increase of 16.02 million shares and is a bullish sign for ZNGA.

In the last three months, insiders executed a total of 8 trades. 8 were sells. Insider ownership decreased by a total of 425164 shares, which suggests that ZNGA’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 4 buys and 40 sells, and ownership decreased by a net of 20.53 million shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. Zynga Inc. (NASDAQ:ZNGA)’s short interest is 18.24 million shares, or 2.56% of the float. This represents a decrease of -9% 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 ZNGA. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that ZNGA is a Weak sell, which implies that ZNGA 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 Zynga Inc. (NASDAQ:ZNGA) is overvalued.

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