On September 5, 2023, Stacy Bowman, the Interim Chief Financial Officer and Chief Accounting Officer of Chewy Inc (CHWY, Financial), sold 900 shares of the company. This move is part of a series of insider transactions that have been taking place over the past year.
But who is Stacy Bowman? Bowman is a seasoned financial executive with a wealth of experience in the retail industry. Prior to her role at Chewy Inc, she held various senior financial roles at other major corporations. Her decision to sell shares of Chewy Inc is noteworthy and warrants further analysis.
Chewy Inc is a leading e-commerce business that specializes in pet products and services. The company offers a broad range of items, including pet food, toys, and medication, and has a strong online presence with a customer-centric approach. Chewy Inc has been successful in capitalizing on the growing trend of pet ownership and the shift towards online shopping.
Over the past year, the insider has sold a total of 103,673 shares and has not purchased any shares. This trend is mirrored in the broader insider transaction history for Chewy Inc, which shows zero insider buys and 26 insider sells over the past year.
The relationship between insider transactions and stock price is complex. Generally, insider selling can be seen as a bearish signal, suggesting that those with the most information about the company believe its stock is overvalued. However, it's important to note that insiders may sell shares for a variety of reasons, not necessarily related to their outlook on the company's future performance.
On the day of the insider's recent sell, shares of Chewy Inc were trading at $25 each, giving the company a market cap of $10.15 billion. The price-earnings ratio stands at 196.50, significantly higher than the industry median of 16.84, but lower than the company’s historical median price-earnings ratio.
Despite this, Chewy Inc appears to be significantly undervalued based on its GuruFocus Value. With a price of $25 and a GuruFocus Value of $54.56, the stock has a price-to-GF-Value ratio of 0.46.
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.
In conclusion, while the insider's recent sell may raise some eyebrows, the stock's current valuation suggests that Chewy Inc may still present a compelling investment opportunity. As always, potential investors should conduct their own thorough research before making any investment decisions.
