On June 13, 2023, Jack Pacheco, the Executive Vice President, Chief Operating Officer, President of Memory Solutions at SMART Global Holdings Inc (SGH, Financial), sold 15,000 shares of the company's stock. This recent transaction is part of a series of insider trades that have taken place over the past year, with Pacheco selling a total of 22,500 shares and purchasing none.
SMART Global Holdings Inc is a global leader in specialty memory, storage, and hybrid solutions, serving the electronics industry. The company's products are used in various applications, including computing, networking, communications, storage, mobile, and industrial devices.
Insider Trends
Over the past year, there have been 2 insider buys and 8 insider sells for SMART Global Holdings Inc. This indicates a trend of more insider selling than buying, which could be a signal for investors to pay attention to the company's stock performance and future prospects.
Valuation
On the day of Jack Pacheco's recent sell, shares of SMART Global Holdings Inc were trading at $25 apiece, giving the stock a market cap of $1.33 billion. The price-earnings ratio is 69.31, which is higher than the industry median of 23.83 and higher than the company's historical median price-earnings ratio.
With a price of $25 and a GuruFocus Value of $23.82, SMART Global Holdings Inc has a price-to-GF-Value ratio of 1.05. This means the stock is modestly overvalued based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus that is calculated based on the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
Considering the insider selling trend and the stock's current valuation, investors should closely monitor SMART Global Holdings Inc's performance and future prospects. While the company has a strong presence in the specialty memory, storage, and hybrid solutions market, the recent insider selling activity and the stock's modest overvaluation may warrant caution for potential investors.
In conclusion, Jack Pacheco's recent sale of 15,000 shares of SMART Global Holdings Inc is part of a larger trend of insider selling over the past year. With the stock trading at a higher price-earnings ratio than the industry median and being modestly overvalued based on its GF Value, investors should keep a close eye on the company's performance and future prospects before making any investment decisions.
