On September 13, 2023, Carl Ledbetter, a director at Cloudflare Inc (NET, Financial), sold 9,993 shares of the company. This move is part of a series of transactions Ledbetter has made over the past year, which have seen him sell a total of 160,461 shares.
Carl Ledbetter is a key figure at Cloudflare Inc, a company that provides a cloud platform that delivers a range of network services to businesses worldwide. These services include content delivery network services, DDoS mitigation, Internet security, and distributed domain name server services. The company's platform protects and accelerates any Internet application online without adding hardware, installing software, or changing a line of code.
The insider's recent sell-off is part of a broader trend at Cloudflare Inc. Over the past year, there have been 66 insider sells and no insider buys. This trend is illustrated in the following image:
The relationship between insider transactions and stock price is complex. While insider selling can sometimes indicate a lack of confidence in the company's future prospects, it can also be a personal decision based on the insider's financial needs or portfolio strategies. Therefore, it's crucial to consider the broader context and not to interpret insider selling as a definitive bearish signal.
On the day of the insider's recent sell, shares of Cloudflare Inc were trading at $64.77, giving the company a market cap of $21.92 billion. Despite the insider selling, the stock appears to be significantly undervalued based on its GuruFocus Value of $141.63, as shown in the following image:
The GuruFocus Value is an intrinsic value estimate that takes into account 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, and future estimates of business performance from Morningstar analysts. With a price-to-GF-Value ratio of 0.46, Cloudflare Inc's stock is significantly undervalued.
In conclusion, while the insider's recent sell-off may raise some eyebrows, the stock's valuation suggests that Cloudflare Inc may still offer good value for investors. As always, potential investors should conduct their own research and consider multiple factors before making investment decisions.
