There are many ways to interpret this information, but here’s how I see it: the company looks attractive at these levels to professional investors. They’re buying from retail investors even at current prices, which suggests they see more value in the company than retail investors do. This is a very positive sentiment, especially after the FDA approval.
This kind of data helps us understand whether a company is undervalued or overvalued right now. Often, when people see professionals selling, they wonder why anyone would sell such a great company with strong fundamentals. My view is that even a great company can be overvalued at a particular moment. That’s when professionals take advantage of high prices to lock in profits, leaving retail investors holding the stock and waiting for the next high.
It’s also important to remember that this data doesn’t predict the future - it reflects current sentiment. There’s always a risk of changes overnight, whether company-specific, industry-wide, or macroeconomic. We can’t predict these changes, but we can learn from professional behavior when to exit or re-enter.
For me, this is a good indicator for picking the best investments from my shortlist. I’d rather invest in companies where professionals are buying than in ones where retail investors are buying, even if the fundamentals seem strong.
One more thing to note: this dynamic can vary depending on the sector and whether the company is a micro-cap, mid-cap, or large-cap. Understanding those differences is key.
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