Recent insider trends for BHP Billiton plc (NYSE:BBL) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on BBL is anything to go by, investors should pay attention.
Institutions own 09.07% of BHP Billiton plc (BBL)’s shares. The total value of these holdings, in millions, is $4,091. Among active positions in the latest quarter, 214 holders increased their positions by a total of 16.75 million shares, 167 holders decreased the positions by a total of 17.41 million shares, and 91 holders held their positions. This works out to a net decrease in ownership of 658290 shares, and suggests that institutions are feeling bearish about the stock.
Among new and sold out positions, 72 holders initiated new positions by a total of 7.18 million shares and 39 holders exited their positions by a total of 3.96 million shares. This nets out to an increase of 3.22 million shares and is a bullish sign for BBL.
Insider ownership increased by a total of 0 shares, which suggests that BBL’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. BHP Billiton plc (NYSE:BBL)’s short interest is 3.22 million shares, or 0.32% of the float. This represents an increase of 230% 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.
Ownership trends and trading patterns can be useful tools for predicting a stock’s performance, but it’s also important to consider the technicals in order to form a more comprehensive view. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that BBL is a Strong buy, which implies that BBL is expected to outperform the market based on prior trading patterns.
Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bullish. Technical indicators (also) suggest that BHP Billiton plc (NYSE:BBL) is undervalued.