Finance

Are Applied Materials, Inc. (AMAT)’s Recent Ownership and Insider Trends a Sign of Things to Come?

Recent insider trends for Applied Materials, Inc. (NASDAQ:AMAT) have caught the attention of investors. Insider data is useful because it can reveal what a company’s executives and largest shareholders feel about a stock. In this case, the data has some interesting things to say about how AMAT might perform in the future.

Institutions own 81.11% of Applied Materials, Inc. (AMAT)’s shares. The total value of these holdings, in millions, is $42,274. Among active positions in the latest quarter, 522 holders increased their positions by a total of 75.25 million shares, 487 holders decreased the positions by a total of 78.54 million shares, and 133 holders held their positions. This works out to a net decrease in ownership of 3.29 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 165 holders initiated new positions by a total of 32.93 million shares and 55 holders exited their positions by a total of 7.59 million shares. This nets out to an increase of 25.34 million shares and is a bullish sign for AMAT.

In the last three months, insiders executed a total of 30 trades. 13 of these were buys and 17 were sells. Insider ownership increased by a total of 403502 shares, which suggests that AMAT’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 24 buys and 25 sells, and ownership increased by a net of 550650 shares.



Short interest is another tool that analysts use to gauge investor sentiment. It represents the number of a stock’s shares that are being shorted by investors. Applied Materials, Inc. (NASDAQ:AMAT)’s short interest is 11.88 million shares, or 1.13% of the float. This represents an increase of 1% in the number of shares being shorted compared to the previous reading, and implies that investors felt more pessimistic about the stock during the past two weeks.

Supplementing insider data with technical indicators can help an investor form a more complete view on the outlook for a stock. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that AMAT is a Weak sell, which implies that AMAT 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 Applied Materials, Inc. (NASDAQ:AMAT) is overvalued.

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