On May 22, 2023, Jack Pacheco, Executive Vice President, Chief Operating Officer, President of Memory Solutions at SMART Global Holdings Inc (SGH, Financial), sold 7,500 shares of the company's stock. This recent transaction marks a notable insider sell, and it is essential to analyze the potential implications of this move on the company's stock price and overall performance.
Who is Jack Pacheco?
Jack Pacheco is a seasoned executive with extensive experience in the technology industry. He currently serves as the Executive Vice President, Chief Operating Officer, and President of Memory Solutions at SMART Global Holdings Inc. Pacheco has played a crucial role in the company's growth and expansion, contributing to its success in the competitive memory solutions market.
SMART Global Holdings Inc's Business Description
SMART Global Holdings Inc is a leading provider of specialty memory, storage, and hybrid solutions for the electronics industry. The company operates through three primary segments: Specialty Memory Solutions, Brazil, and Specialty Compute and Storage Solutions. SMART Global Holdings Inc serves a diverse range of customers, including original equipment manufacturers (OEMs), data centers, and enterprise customers, offering a wide array of products and services to meet their specific needs.
Analysis of Insider Buy/Sell and Relationship with Stock Price
Over the past year, Jack Pacheco has sold a total of 7,500 shares and purchased 0 shares. The insider transaction history for SMART Global Holdings Inc reveals that there have been 2 insider buys and 6 insider sells over the past year. This data suggests that insiders may have a bearish outlook on the company's stock, as they have been more inclined to sell their shares rather than buy.
On the day of Jack Pacheco's recent sell, shares of SMART Global Holdings Inc were trading at $20 apiece, giving the stock a market cap of $1,000.573 million. The price-earnings ratio is 52.28, which is higher than the industry median of 22.43 and higher than the company's historical median price-earnings ratio. This indicates that the stock may be overvalued compared to its peers and its historical performance.
However, with a price of $20 and a GuruFocus Value of $23.95, SMART Global Holdings Inc has a price-to-GF-Value ratio of 0.84. This suggests that the stock is modestly undervalued based on its GF Value. The GF Value is an intrinsic value estimate developed by GuruFocus, calculated using 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.
In conclusion, while Jack Pacheco's recent sale of 7,500 shares of SMART Global Holdings Inc may raise concerns among investors, it is essential to consider the stock's valuation and overall performance. The stock appears to be modestly undervalued based on its GF Value, but its high price-earnings ratio compared to the industry median and historical performance suggests caution. Investors should keep a close eye on the company's financials, insider transactions, and industry trends to make informed decisions about their investments in SMART Global Holdings Inc.
