Insider buying can provide valuable trading signals. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
In this report, we are going to highlight some interesting insider buying at CrowdStrike Holdings Inc (CRWD:US). CrowdStrike is a cybersecurity company that provides endpoint security, threat intelligence, and cyber attack response services. Its platform, Falcon, is a multi-tenant, cloud native, intelligent security solution capable of protecting workloads across on-premise, virtualized, and cloud-based environments. The company is listed on the Nasdaq and currently has a market capitalization of $24.46 billion.
Insider Buying at CrowdStrike
2iQ data shows that between December 27 and December 28, CrowdStrike board member Roxanne Austin purchased 25,000 CRWD shares at an average price of $99.74 per share. This trading activity cost the insider around $2.5 million and increased her holding to 65,419 shares.
Ms. Austin has a background in investment management. Currently, she is President and CEO of Austin Investment Advisors, a private investment and consulting firm. She also chairs the US Mid-market Investment Advisory Committee of EQT Partners. This means that she is likely to have a good understanding of CrowdStrike’s investment potential.
What stands out here is the size of Ms. Austin’s purchase. The fact that the insider has invested nearly $2.5 million in CrowdStrike suggests that she is very confident that the stock is set to move higher.
Strong Top-line Growth
CrowdStrike’s recent Q3 fiscal 2023 results showed that the company continues to grow at pace.
For the three months to the end of October 2023, revenue amounted to $581 million, up 53% year on year. Net cash generated from operations was $242.9 million versus $159.1 million in the third quarter of fiscal 2022 while free cash flow was $174.1 million compared to $123.5 million a year earlier.
“In the face of increased macroeconomic headwinds, CrowdStrike delivered revenue and earnings results ahead of our guidance. We will continue to focus on delivering strong unit economics as we balance growth with profitability and free cash flow,” commented CFO Burt Podbere.
Looking ahead, management was confident in relation to the firm’s long-term prospects.
“As a platform consolidator with industry leading efficacy, we differentiate ourselves from the competition and empower customers, which we believe positions us to capture enduring industry trends and generate durable long-term growth,” said CEO George Kurtz.
In light of the company’s growth, and the fact that the stock has lost nearly half of its value over the last year, we see the insider buying here as a bullish signal.