Robin Washington, a director at Salesforce (CRM), recently bought 1,695 shares. The purchase increased her stake by 4% and came to a total cost of $499,355.
This marks the first insider buy since last June, when another director bought 2,050 shares, also for about $500,000. Otherwise, company insiders, including the company’s CFO and COO, have been substantial sellers of shares at higher prices. Most of the sales have occurred following the exercise of stock options.
Overall, Salesforce insiders own 3% of shares.
The customer management software giant has traded flat over the past year, even as the overall S&P 500 is up about 15% over the same period.
Operationally, Salesforce has been faring just fine, with earnings up about 8% and earnings growth rising by 18% over the past year. Profit margins are a little low for a software company at about 16%, but that can be improved with new AI tools coming online.
Salesforce are reasonably valued at about 26 times forward earnings. If earnings growth could accelerate, Salesforce could see a turnaround and shares could rally higher.
Action to take: For now, with shares in a downtrend, interested investors may want to look closer to the $250 range where the stock has stronger support.
For traders, with the current downtrend in mind, the May $250 puts, last trading for about $5.05, could see further mid-double-digit returns from here. Traders should look to take profits off the table if shares start to show signs of a reversal higher.
Disclosure: The author of this article has no position in the company mentioned here, but may further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.