Finance

Dissecting the Insider Trading Patterns of JD.com, Inc. (JD)

Recent insider trends for JD.com, Inc. (NASDAQ:JD) have caught the attention of investors. Analysts monitor insider data to understand the sentiment of a company’s largest and most important shareholders. JD’s insider trading patterns have some implications for where the stock might be headed.

Institutions own 27.34% of JD.com, Inc. (JD)’s shares. The total value of these holdings, in millions, is $29,043. Among active positions in the latest quarter, 303 holders increased their positions by a total of 79.78 million shares, 185 holders decreased the positions by a total of 94.02 million shares, and 53 holders held their positions. This works out to a net decrease in ownership of 14.24 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 98 holders initiated new positions by a total of 15.3 million shares and 53 holders exited their positions by a total of 31.63 million shares. This nets out to a decrease of 16.33 million shares and is another bearish sign for JD.

Insider ownership increased by a total of 0 shares, which suggests that JD’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: and ownership increased by a net of 0 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. JD.com, Inc. (NASDAQ:JD)’s short interest is 36.68 million shares, or 4.75% of the float. This represents a decrease of -12% 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.

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 JD is a Weak buy, which implies that JD 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 bullish. Technical indicators (also) suggest that JD.com, Inc. (NASDAQ:JD) is undervalued.

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