On May 22, 2023, Douglas Herrington, CEO Worldwide Amazon Stores, sold 9,472 shares of Amazon.com Inc (AMZN, Financial) at a price of $115.56 per share. This insider sell comes amidst a year of significant insider selling activity for the company.
Who is Douglas Herrington?
Douglas Herrington is the CEO Worldwide Amazon Stores at Amazon.com Inc. He has been with the company for several years and has played a crucial role in the growth and expansion of Amazon's global retail operations. Herrington's leadership has been instrumental in driving the company's success in various markets around the world.
Amazon.com Inc's Business Description
Amazon.com Inc is a multinational technology company based in Seattle, Washington. It focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. Amazon is one of the world's largest online retailers and a prominent cloud services provider. The company was founded by Jeff Bezos in 1994 and has since grown to become a global leader in the technology industry.
Insider Buy/Sell Analysis and Relationship with Stock Price
Over the past year, Douglas Herrington has sold a total of 79,270 shares and purchased 0 shares. This indicates a trend of insider selling for Herrington. The insider transaction history for Amazon.com Inc shows that there have been 0 insider buys in total over the past year, while there have been 42 insider sells during the same period. This suggests a bearish sentiment among insiders.
On the day of Douglas Herrington's recent sell, Amazon.com Inc's shares were trading at $115.56 apiece, giving the stock a market cap of $1,197,896.291 million. The price-earnings ratio is 277.98, which is higher than the industry median of 15.95 and higher than the company's historical median price-earnings ratio. This indicates that the stock may be overvalued compared to its peers and historical performance.
However, with a price of $115.56 and a GuruFocus Value of $198.97, Amazon.com Inc has a price-to-GF-Value ratio of 0.58. This means the stock is significantly undervalued based on its GF Value. The discrepancy between the price-earnings ratio and the price-to-GF-Value ratio suggests that the market may not be fully pricing in Amazon's growth potential and future performance.
The GF Value is an intrinsic value estimate developed by GuruFocus that is calculated based on the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
In conclusion, the recent insider sell by Douglas Herrington, along with the overall trend of insider selling at Amazon.com Inc, may raise concerns for investors. However, the stock's price-to-GF-Value ratio suggests that it is significantly undervalued, indicating potential upside for long-term investors. As always, it is essential for investors to conduct their research and consider multiple factors before making any investment decisions.
