On June 14, 2023, Marc Benioff, Chair and CEO of Salesforce Inc (CRM, Financial), sold 500,000 shares of the company. This move comes as part of a series of transactions made by Benioff over the past year, during which he has sold a total of 1,361,825 shares and purchased none.
Salesforce Inc is a leading provider of enterprise cloud computing solutions, offering a comprehensive suite of applications for businesses to manage customer relationships, sales, marketing, and other essential operations. The company has experienced significant growth in recent years, becoming a dominant player in the CRM software market.
Insider Trends
The insider transaction history for Salesforce Inc reveals a trend of insider selling over the past year, with 0 insider buys and 229 insider sells recorded during this period.
This trend of insider selling could be indicative of a perceived overvaluation of the stock by company insiders, or it could simply be a result of executives cashing in on their stock options. Regardless, it is essential for investors to consider this information when making investment decisions.
Valuation
On the day of Marc Benioff's recent sale, shares of Salesforce Inc were trading at $209.14, giving the company a market cap of $206.254 billion.
The stock's price-earnings ratio is 557.26, which is significantly higher than the industry median of 28.14 and the company's historical median price-earnings ratio. This elevated valuation could be a contributing factor to the recent insider selling activity.
According to the GuruFocus Value, which stands at $297.28, Salesforce Inc has a price-to-GF-Value ratio of 0.7. This suggests that the stock is currently modestly undervalued based on its intrinsic value estimate.
The GF Value is calculated using three key factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) at which the stock has traded.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
In conclusion, while the recent insider selling activity at Salesforce Inc may raise some concerns for investors, the stock's current valuation suggests that it may still be an attractive investment opportunity. As always, it is crucial for investors to conduct thorough research and consider both the company's fundamentals and the broader market context before making any investment decisions.
