Finance

Dissecting the Insider Trading Patterns of Visa Inc. (V)

Recent insider trends for Visa Inc. (NYSE:V) 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 V might perform in the future.

Institutions own 94.22% of Visa Inc. (V)’s shares. The total value of these holdings, in millions, is $211,015. Among active positions in the latest quarter, 991 holders increased their positions by a total of 48.4 million shares, 857 holders decreased the positions by a total of 72.82 million shares, and 232 holders held their positions. This works out to a net decrease in ownership of 24.42 million shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 253 holders initiated new positions by a total of 11.05 million shares and 62 holders exited their positions by a total of 6.91 million shares. This nets out to an increase of 4.13 million shares and is a bullish sign for V.

In the last three months, insiders executed a total of 4 trades. 4 were sells. Insider ownership decreased by a total of 70325 shares, which suggests that V’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 7 buys and 27 sells, and ownership decreased by a net of 313942 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. Visa Inc. (NYSE:V)’s short interest is 25.28 million shares, or 1.40% of the float. This represents a decrease of -3% 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.

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 V is a buy, which implies that V 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 bearish. Technical indicators (also) suggest that Visa Inc. (NYSE:V) is undervalued.

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