Finance

Are Calpine Corporation (CPN)’s Recent Ownership and Insider Trends a Sign of Things to Come?

Recent insider trends for Calpine Corporation (NYSE:CPN) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on CPN is anything to go by, investors should pay attention.

Institutions own 91.28% of Calpine Corporation (CPN)’s shares. The total value of these holdings, in millions, is $4,967. Among active positions in the latest quarter, 150 holders increased their positions by a total of 137.35 million shares, 152 holders decreased the positions by a total of 159.07 million shares, and 35 holders held their positions. This works out to a net decrease in ownership of 21.72 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 85 holders initiated new positions by a total of 95.92 million shares and 61 holders exited their positions by a total of 74.36 million shares. This nets out to an increase of 21.56 million shares and is a bullish sign for CPN.

In the last three months, insiders executed a total of 5 trades. 5 were sells. Insider ownership decreased by a total of 244306 shares, which suggests that CPN’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 9 buys and 22 sells, and ownership decreased by a net of 1.18 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. Calpine Corporation (NYSE:CPN)’s short interest is 11.52 million shares, or 3.24% of the float. This represents a decrease of -35% 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.

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 CPN is a Weak buy, which implies that CPN 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 bearish. Technical indicators (also) suggest that Calpine Corporation (NYSE:CPN) is undervalued.

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