On May 23, 2023, Kenneth Lorton, the Executive Vice President and Chief Technology Officer of Schrodinger Inc (SDGR, Financial), sold 10,000 shares of the company's stock. This move comes amidst a year of insider selling activity for Schrodinger Inc, with no insider buys recorded over the past year.
Who is Kenneth Lorton?
Kenneth Lorton is the Executive Vice President and Chief Technology Officer of Schrodinger Inc. He has been with the company since 2016 and has played a crucial role in the development and implementation of the company's technology strategy. Lorton's expertise in computational chemistry and software development has been instrumental in driving Schrodinger's growth and success in the market.
About Schrodinger Inc
Schrodinger Inc is a leading provider of advanced molecular simulations and enterprise software solutions for the life sciences and materials research industries. The company's cutting-edge technology enables researchers to accelerate the discovery and development of novel drugs, materials, and other molecular systems. Schrodinger's software is used by pharmaceutical, biotechnology, and materials science companies worldwide to improve the efficiency and effectiveness of their research and development efforts.
Insider Trading Analysis
Over the past year, Kenneth Lorton has sold a total of 10,000 shares and purchased 0 shares. This recent sale of 10,000 shares is part of a broader trend of insider selling at Schrodinger Inc, with a total of 6 insider sells recorded over the past year and no insider buys. This could be an indication that insiders believe the stock is overvalued or that they are taking profits after a period of growth.
Stock Price and Valuation
On the day of Kenneth Lorton's recent sale, shares of Schrodinger Inc were trading at $40.06 apiece, giving the stock a market capitalization of $2,655.905 million. The price-earnings ratio of the stock is 285.62, which is significantly higher than the industry median of 26.17 and the company's historical median price-earnings ratio. This suggests that the stock may be overvalued compared to its peers and its historical trading levels.
However, with a price of $40.06 and a GuruFocus Value of $69.28, Schrodinger Inc has a price-to-GF-Value ratio of 0.58. This indicates that the stock is significantly undervalued based on its GF Value. The GF Value is an intrinsic value estimate developed by GuruFocus, which takes into account historical multiples, a GuruFocus adjustment factor, and future estimates of business performance from Morningstar analysts.
Conclusion
The recent sale of 10,000 shares by EVP & Chief Technology Officer Kenneth Lorton is part of a broader trend of insider selling at Schrodinger Inc. While the stock's price-earnings ratio suggests it may be overvalued compared to its industry peers and historical levels, the price-to-GF-Value ratio indicates that the stock is significantly undervalued based on its intrinsic value. Investors should carefully consider these factors and conduct further research before making any investment decisions regarding Schrodinger Inc.
