On May 23, 2023, Kenneth Lorton, the Executive Vice President and Chief Technology Officer of Schrodinger Inc (SDGR, Financial), sold 10,000 shares of the company's stock. This recent transaction has raised questions about the company's future prospects and the relationship between insider trading and stock price.
Who is Kenneth Lorton?
Kenneth Lorton is the Executive Vice President and Chief Technology Officer of Schrodinger Inc. He has been with the company for several years and has played a crucial role in the development and implementation of the company's technology and software solutions. His expertise and leadership have been instrumental in driving the company's growth and success.
About Schrodinger Inc
Schrodinger Inc is a leading provider of advanced molecular simulations and enterprise software solutions for the life sciences and materials science industries. The company's cutting-edge technology enables researchers to accelerate the discovery and development of novel drugs, materials, and other applications. Schrodinger's software solutions are used by pharmaceutical, biotechnology, and materials science companies worldwide to improve the efficiency and effectiveness of their research and development efforts.
Insider Trading Analysis
Over the past year, Kenneth Lorton has sold a total of 10,000 shares and purchased 0 shares. The insider transaction history for Schrodinger Inc shows that there have been 0 insider buys in total over the past year, while there have been 6 insider sells during the same period. This trend may indicate that insiders are not confident in the company's future prospects or that they believe the stock is overvalued.
Stock Price and Valuation
On the day of Kenneth Lorton's recent sale, shares of Schrodinger Inc were trading at $40.06 apiece, giving the stock a market cap of $2,547.895 million. The price-earnings ratio is 274.00, which is significantly higher than the industry median of 25.42 and higher than the company's historical median price-earnings ratio. This suggests that the stock may be overvalued compared to its peers and its historical valuation.
However, with a price of $40.06 and a GuruFocus Value of $69.28, Schrodinger 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 may indicate that the market has not yet recognized the company's true value.
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, Kenneth Lorton's recent sale of 10,000 shares of Schrodinger Inc has raised questions about the company's future prospects and the relationship between insider trading and stock price. While the stock appears to be overvalued based on its price-earnings ratio, the price-to-GF-Value ratio suggests that it may be significantly undervalued. Investors should carefully consider these factors and conduct further research before making any investment decisions.
