On May 22, 2023, Brian Olsavsky, Senior Vice President and CFO of Amazon.com Inc (AMZN, Financial), sold 16,800 shares of the company's stock. This recent transaction is part of a series of insider sales by Olsavsky over the past year, during which he has sold a total of 65,520 shares and purchased none.
Who is Brian Olsavsky?
Brian Olsavsky has been with Amazon.com Inc since 2002 and has held various positions within the company. He was appointed as the Senior Vice President and CFO in June 2015. In his role, Olsavsky is responsible for overseeing the company's global financial activities, including controllership, tax, treasury, analysis, investor relations, internal audit, and financial operations.
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. The company is known for its disruption of well-established industries through technological innovation and mass scale. 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 sector.
Insider Trends
The insider transaction history for Amazon.com Inc reveals that there have been no insider buys over the past year. In contrast, there have been 42 insider sells during the same period. This trend suggests that insiders may be taking advantage of the stock's current valuation to realize gains.
Valuation
On the day of Brian Olsavsky's recent sale, shares of Amazon.com Inc were trading at $116.69 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 its own historical valuation.
With a price of $116.69 and a GuruFocus Value of $198.97, Amazon.com Inc has a price-to-GF-Value ratio of 0.59. This suggests that the stock is significantly undervalued based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus, 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.
Analysis of Insider Buy/Sell and Relationship with Stock Price
The recent insider sell by Brian Olsavsky, along with the overall trend of insider sells over the past year, may raise concerns for some investors. However, it is essential to consider the stock's valuation and the company's performance when analyzing insider transactions. While the price-earnings ratio suggests that the stock may be overvalued compared to its industry peers and historical valuation, the price-to-GF-Value ratio indicates that the stock is significantly undervalued based on its intrinsic value.
Investors should keep a close eye on insider transactions and the stock's valuation to make informed decisions. It is also crucial to consider the company's overall performance, growth prospects, and competitive position in the industry when evaluating the stock's potential as an investment.
