Recent insider trends for Teradyne, Inc. (NYSE:TER) have caught the attention of investors. Patters in insider activity can help analysts formulate an outlook for a stock. In the case of TER, the data has a lot to say about how the stock might perform going forward.
Institutions own 98.76% of Teradyne, Inc. (TER)’s shares. The total value of these holdings, in millions, is $7,842. Among active positions in the latest quarter, 200 holders increased their positions by a total of 25.39 million shares, 212 holders decreased the positions by a total of 23.32 million shares, and 51 holders held their positions. This works out to a net increase in ownership of 2.07 million shares, and suggests that institutions are feeling bullish about the stock.
Among new and sold out positions, 68 holders initiated new positions by a total of 6.26 million shares and 45 holders exited their positions by a total of 4.03 million shares. This nets out to an increase of 2.23 million shares and is a bullish sign for TER.
In the last three months, insiders executed a total of 24 trades. 24 were sells. Insider ownership decreased by a total of 303202 shares, which suggests that TER’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 49 sells, and ownership decreased by a net of 825718 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. Teradyne, Inc. (NYSE:TER)’s short interest is 9.14 million shares, or 4.68% of the float. This represents an increase of 9% 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.
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 TER. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that TER is a Weak sell, which implies that TER is expected to underperform 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 bearish. Technical indicators (also) suggest that Teradyne, Inc. (NYSE:TER) is overvalued.