On June 30, 2023, Yvonne Tran, the Executive Vice President, Chief Legal Officer, and Chief People Officer of Schrodinger Inc, sold 12,040 shares of the company. This move is part of a series of transactions Tran has made over the past year, selling a total of 60,000 shares and purchasing none.
Schrodinger Inc is a leading company in the field of computational software for drug discovery and materials science research. The company's software is used by pharmaceutical and biotechnology companies worldwide to accelerate their research and development activities. Schrodinger's solutions have been instrumental in the discovery of novel drugs and materials, making it a key player in the industry.
The insider transaction history for Schrodinger Inc shows a trend of more sells than buys over the past year. There have been seven insider sells and zero insider buys, indicating a possible bearish sentiment among the company's insiders.
On the day of Tran's recent sell, Schrodinger Inc's shares were trading at $50 each, giving the company a market cap of approximately $3.48 billion. The price-earnings ratio stands at a high 374.23, significantly above the industry median of 26.58 and the company's historical median price-earnings ratio. This suggests that the stock is currently trading at a premium compared to its earnings.
However, when we look at the price-to-GF-Value ratio, which is 0.71, we find that the stock is significantly undervalued based on its GF Value of $70.79. The GF Value is an intrinsic value estimate developed by GuruFocus, calculated based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates from Morningstar analysts.
The discrepancy between the high price-earnings ratio and the low price-to-GF-Value ratio suggests that while the stock may seem overpriced based on its current earnings, it could be undervalued when considering its future growth potential and historical trading multiples.
In conclusion, the recent insider sell by Yvonne Tran, along with the overall trend of insider sells at Schrodinger Inc, may raise some concerns among investors. However, the company's strong position in its industry and its potential for future growth, as indicated by its GF Value, suggest that the stock could still be a good investment opportunity. As always, investors should conduct their own thorough research before making any investment decisions.
