On July 6, 2023, Lewis Cirne, the Executive Chairman and 10% Owner of New Relic Inc (NEWR, Financial), sold 15,000 shares of the company. This move is part of a series of transactions Cirne has made over the past year, during which he sold a total of 284,000 shares and made no purchases.
Lewis Cirne is a significant figure in the tech industry, having founded New Relic Inc, a software analytics company that provides real-time performance insights into software, infrastructure, and customer experience. The company helps businesses to innovate faster by visualizing, analyzing, and troubleshooting their software. Cirne, as the Executive Chairman and a 10% owner, plays a crucial role in the company's strategic decisions.
The insider transaction history for New Relic Inc shows a trend of more sells than buys over the past year. There have been 52 insider sells and no insider buys. This could be a signal to investors to be cautious, as it might indicate that those with the most intimate knowledge of the company do not see the stock as undervalued.
However, the valuation of New Relic Inc tells a different story. On the day of Cirne's recent sell, the shares were trading at $65.54, giving the company a market cap of $4.82 billion. The GuruFocus Value of the stock is $79.81, indicating that the stock is modestly undervalued with a price-to-GF-Value ratio of 0.82.
The GF Value is a proprietary estimate of intrinsic value developed by GuruFocus, based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates from Morningstar analysts. In the case of New Relic Inc, the GF Value suggests potential upside for the stock, despite the recent insider selling activity.
In conclusion, while the insider selling activity by Lewis Cirne might raise some eyebrows, the valuation metrics suggest that New Relic Inc's stock is modestly undervalued. Investors should consider both these factors, along with the company's business performance and market conditions, before making investment decisions.
