Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at Adobe Inc (ADBE:US). Adobe is a multinational software company that has millions of users worldwide. Historically, it has specialized in software for content creation, however, more recently it has expanded into digital marketing software. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $250 billion.
Adobe Inc: Insider Buying
Our insider transaction data shows that this month, board member Laura Desmond has purchased Adobe stock on two occasions.
On January 6, the insider bought 482 shares at a price of $517.63 per share, spending $249,498 on stock. Then, on January 7, she picked up another 491 shares at a price of $509.72 per share, spending $250,273 on stock.
In total, the insider spent just under $500,000 on Adobe stock.
This trading activity is worth highlighting for a couple of reasons. Firstly, insider purchases at Adobe are quite rare. Our records show that these buys from Ms. Desmond are the first purchases from insiders since December 2018.
Secondly, Ms. Desmond has an investment background. Currently, she is Founder and CEO of Eagle Vista Partners, a strategic advisory and investment firm focused on marketing and digital technology. She is also an Operating Partner in the Media & Technology Practice at Providence Equity Partners, a private equity investment firm. This means she is likely to have an excellent understanding of the intrinsic value here.
Share Price Weakness
Adobe’s recent Q4 results, posted in December, showed that the company continues to grow at a healthy rate.
For the quarter ended December 3, 2021, revenue came in at a record $4.11 billion, up 20% year on year, while operating income amounted to $1.5 billion, up from $1.2 billion a year earlier. Cash flows from operations were a record $2.05 billion.
However, investors didn’t like the company’s forecasts for fiscal 2022 and Q1, which were below consensus forecasts. As a result of the underwhelming forecasts, as well as a general sell-off in the tech sector, the stock has fallen from around $630 to near $500 since the results.
The buying here from Ms. Desmond indicates that she sees value at current levels and that she expects the stock to bounce back. Given the size of her purchases, we see her trading activity as a bullish indicator.