Finance

Analyzing the Insider Data for FormFactor, Inc. (FORM)

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

Institutions own 82.98% of FormFactor, Inc. (FORM)’s shares. The total value of these holdings, in millions, is $743. Among active positions in the latest quarter, 98 holders increased their positions by a total of 8.6 million shares, 83 holders decreased the positions by a total of 9.14 million shares, and 12 holders held their positions. This works out to a net decrease in ownership of 542254 shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 37 holders initiated new positions by a total of 2.21 million shares and 20 holders exited their positions by a total of 3.77 million shares. This nets out to a decrease of 1.56 million shares and is another bearish sign for FORM.

Insider ownership increased by a total of 0 shares, which suggests that FORM’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 1 buys and 30 sells, and ownership decreased by a net of 922990 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. FormFactor, Inc. (NASDAQ:FORM)’s short interest is 849800 shares, or 1.18% of the float. This represents a decrease of -25% 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 FORM. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that FORM is a Strong sell, which implies that FORM 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 FormFactor, Inc. (NASDAQ:FORM) is overvalued.

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