Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a bullish signal.
Here, we are going to highlight insider buying at Smartsheet Inc (SMAR:US). Smartsheet is a software company that provides a platform to businesses that allow employees within the company to collaborate and manage their workload effectively. Whilst its headquarters are in the US, Smartsheet has offices globally and its customers are spread throughout nearly 200 countries. It is traded on the New York Stock Exchange and currently has a market capitalization of $9.1 billion.
Smartsheet Inc: Insider Buying
Our insider transaction data shows that on December 10, a director at Smartsheet, Matthew McIlwain, purchased 15,000 SMAR shares at a price of $70.88. This trade cost the director around $1.1 million and increased his holding by about 14%.
Mr. McIllwain has an investment background. Currently, he is a managing director at venture capital firm Madrona Venture Group. His focus is on software and data driven companies which means he is likely to be very familiar with the sector Smartsheet is in. He also sits on the board of a number of companies in the technology and software space such as ExtraHop and Skytap and has previously sat on the board of a number of businesses that have been acquired such as Isilon Systems and World Wide Packets.
What stands out about this trade is that the insider has invested over $1 million on company stock. This suggests that he is very confident in the future prospects of the business.
Strong Revenue Growth
Smartsheet continued to make good progress during the third quarter as key indicators showed there was strong growth within the business.
For the period, total revenue came in at $144.6 million, up 46% on the year prior. Meanwhile, the number of clients with an actual cash value of $100,000 or more rose to 868, which was an increase of 72% year on year, and the average actual cash value per domain-based customer increased 37% to $6,368.
Looking ahead, the company guided to year over year growth in calculated billings to be 37%-40% for fiscal 2023.
“This was a record quarter for Smartsheet on multiple financial and operational levels, including closing the highest number of large deals in a quarter and seeing the best bookings performance in our company’s history. Our business model and teams are primed to seize the enormous opportunity ahead of us to help global customers of all sizes transform how they work,” said Mark Mader, President and CEO of Smartsheet.
On the back of these encouraging Q3 figures that include a confident statement from the CEO, we see the insider buying here as bullish. When a director buys a large amount of company stock like this, it is nearly always an indicator that they are very confident in the future prospects of the business and that they believe the market is undervaluing the shares.