On May 22, 2023, Michael Cannon-Brookes, Co-Founder, Co-CEO, and 10% Owner of Atlassian Corp (TEAM, Financial), sold 8,614 shares of the company. This recent transaction is part of a broader trend of insider selling over the past year, with Cannon-Brookes having sold a total of 1,352,398 shares and purchased none.
Who is Michael Cannon-Brookes?
Michael Cannon-Brookes is the Co-Founder and Co-CEO of Atlassian Corp, an Australian software company that specializes in developing products for project management, content management, and software development. Cannon-Brookes co-founded the company with Scott Farquhar in 2002, and since then, Atlassian has grown to become a global leader in its industry.
About Atlassian Corp
Atlassian Corp is a leading provider of collaboration, development, and issue tracking software for teams. The company's products include Jira, Confluence, Bitbucket, and Trello, which help teams to plan, track, and release high-quality software. Atlassian serves a wide range of industries, including technology, finance, healthcare, and government, with customers in over 190 countries.
Insider Trends
The insider transaction history for Atlassian Corp reveals that there have been no insider buys over the past year. In contrast, there have been 343 insider sells during the same period. This trend suggests that insiders may be taking advantage of the stock's current valuation to realize gains.
Valuation
On the day of Michael Cannon-Brookes's recent sale, shares of Atlassian Corp were trading at $157.36 apiece, giving the stock a market cap of $41,285.643 million.
With a price of $157.36 and a GuruFocus Value of $396.36, Atlassian Corp has a price-to-GF-Value ratio of 0.4. This indicates that the stock is significantly undervalued based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus, 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.
Analysis of Insider Buy/Sell and Relationship with Stock Price
The significant number of insider sells over the past year, combined with the absence of insider buys, may raise concerns for some investors. However, it is essential to consider the context of these transactions and the stock's current valuation. With a price-to-GF-Value ratio of 0.4, Atlassian Corp's stock appears to be significantly undervalued, which could explain the high volume of insider selling as insiders capitalize on the current market price.
It is also worth noting that Michael Cannon-Brookes's recent sale of 8,614 shares represents a relatively small portion of his total holdings in the company. As a 10% owner, Cannon-Brookes still maintains a substantial stake in Atlassian Corp, indicating his continued confidence in the company's future prospects.
In conclusion, while the trend of insider selling at Atlassian Corp may be noteworthy, it is essential to consider the stock's current valuation and the broader context of these transactions. Investors should continue to monitor insider activity and other relevant factors to make informed decisions about the stock.
