On July 28, 2023, Marc Benioff, Chair and CEO of Salesforce Inc (CRM, Financial), sold 15,000 shares of the company. This move is part of a larger trend, as over the past year, Benioff has sold a total of 965,125 shares and purchased none.
Marc Benioff is a renowned figure in the tech industry. He co-founded Salesforce Inc in 1999 and has since served as its Chair and CEO. Under his leadership, Salesforce has grown into a leading provider of enterprise software, specializing in customer relationship management (CRM, Financial) products. The company's services allow businesses to use cloud technology to better connect with their customers, partners, and potential clients.
Salesforce Inc's business model revolves around its cloud-based CRM platform. The company offers a comprehensive suite of services, including sales force automation, customer service and support, marketing automation, digital commerce, community management, analytics, application development, IoT integration, collaborative productivity tools, AI-powered insights, and industry-specific solutions. With a market cap of $219.16 billion, Salesforce Inc is a major player in the tech industry.
The insider transaction history for Salesforce Inc shows a clear trend. Over the past year, there have been no insider buys and 236 insider sells. This trend is visualized in the following image:
On the day of Benioff's recent sell, Salesforce Inc shares were trading for $225.36 each. This gives the stock a price-earnings ratio of 592.13, significantly higher than the industry median of 28.3 and the company's historical median price-earnings ratio. Despite this, the stock is considered modestly undervalued based on its GuruFocus Value of $301.14, resulting in a price-to-GF-Value ratio of 0.75.
The GF Value is an intrinsic value estimate developed by GuruFocus. It is calculated based on historical multiples that the stock has traded at, a GuruFocus adjustment factor based on the company's past returns and growth, and future estimates of business performance from Morningstar analysts. The GF Value for Salesforce Inc is visualized in the following image:
The relationship between insider sell/buy activities and stock price is complex. While a high volume of insider selling can sometimes indicate a lack of confidence in the company's future performance, it can also be a result of personal financial planning or other non-performance related factors. In the case of Salesforce Inc, the high volume of insider selling over the past year, coupled with the stock's high price-earnings ratio, may raise some concerns. However, the stock's modest undervaluation based on its GF Value suggests potential for future growth.
As always, investors should consider a variety of factors, including insider trading trends, valuation metrics, and broader market conditions, when making investment decisions.
