Insider Weekends: Mark Peek Purchases $1 Million Worth Of SentinelOne

Apr. 18, 2022 6:00 AM ETSentinelOne, Inc. (S)ABNB, CDZAP, CDZI, CHPT, GOOG, GOOGL, GXO, KNBE, PLAY, PNTG, RKT, VMW, WDAY, XPO6 Comments13 Likes

Summary

  • Potential disruption to businesses from cyber attacks has translated into an increase in cybersecurity spending.
  • SentinelOne is a cybersecurity company, which focuses on endpoint security by securing desktops, laptops, phone and other endpoint devices.
  • SentinelOne’s stock had been hit hard in recent months along with other technology companies and last week dipped below its June 2021 IPO price of $35 per share.
  • This probably triggered the insider purchase by independent director Mark Peek who picked up 30,000 shares at an average price of $34.40 through a trust.
  • Looking for more investing ideas like this one? Get them exclusively at Inside Arbitrage. Learn More »

Analyzing the back door

eclipse_images/E+ via Getty Images

Cybersecurity has been top of mind for most companies and governments in recent years as ransomware attacks, phishing attacks and denial-of-service (DOS) attacks have increased. The potential disruption to businesses from these kinds of attacks has translated into an increase in cybersecurity spending and there are different companies that help with different aspects of a company's security infrastructure.

We have all heard various stories of companies falling victim to cybersecurity attacks but my favorite anecdote was of a large private equity firm that was doing due diligence on the security company KnowBe4 (KNBE). They triggered a test phishing email to its internal staff to see how many would end up falling for the phishing attack. A phishing attack is triggered by malicious actors that want to get money or access to company systems by sending an email to company employees masquerading as someone the employee might know, for example the CEO of the company. Clicking on an attachment or a link in the email, often triggers the "payload" and in other cases the attackers what the employee to respond to them. The private equity firm (KKR if I remember correctly) was shocked by just how many of its employees ended up opening or engaging with the test phishing email they sent through KnowBe4 and ended up investing in the company.

KnowBe4 went public almost a year ago at $16 per share and is still up 44% from that IPO price. SentinelOne (NYSE:S) is another cybersecurity company, which focuses on endpoint security by securing desktops, laptops, phone and other endpoint devices. The company provides SaaS, hybrid and on-premise solutions as well as one-click remediation and rollback services. The company has hundreds of global customers including three out of the Fortune 10 companies.

Sentinel One Customers

Sentinel One Customers (Company Website)

SentinelOne's stock had been hit hard in recent months along with other technology companies and last week dipped below its June 2021 IPO price of $35 per share. This probably triggered the insider purchase by independent director Mark Peek who picked up 30,000 shares at an average price of $34.40 through a trust. Mr. Peek also purchased 30,000 shares last December at a much higher average price of $48.02. Shortly after the company went public Dan Loeb and Third Point, picked up an additional 2.2 million shares at an average price of $41.08 last July. They have recently been sellers of the stock as you can see here. Mr. Peek is currently a Managing Director at Workday ventures having previously worked as Workday's CFO and Co-President from 2012 to 2018. Before he joined Workday (WDAY), he spent 5 years as the CFO of VMWare (VMW).

Like most SaaS technology companies, SentinelOne is focused on growth and is not profitable. The company grew its revenue by 120% last fiscal year (ended Jan 2022) to $205 million and analysts expect revenue to grow to $370 million this fiscal year, representing over 80% growth year-over-year. Valuation is rich at over 23 times fiscal 2023 sales and the company has over $1.6 billion in net cash on its balance sheet to fund its growth. Whether the market is willing to continue affording a rich valuation to an unprofitable technology company in this environment remains to be seen.

Insider buying declined last week with insiders purchasing $64.39 million of stock compared to $113.3 million in the week prior. Selling on the other hand increased to $1.58 billion compared to $1.41 billion in the week prior.

Sell/Buy Ratio:

The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 24.52. In other words, insiders sold almost 25 times as much stock as they purchased. The Sell/Buy ratio this week was unfavorable compared to the prior week when the ratio stood at 12.43.

Notable Insider Buys:

1. SentinelOne, Inc.: $37.12

Director Mark S. Peek acquired 30,000 shares of this cybersecurity provider, paying $34.40 per share for a total amount of $1.03 million. These shares were purchased indirectly through a trust.

P/E: N/A Forward P/E: -80.7 Industry P/E: 54.80
P/S: 49.26 Price/Book: 6.08 EV/EBITDA: -32.49
Market Cap: $10.09B Avg. Daily Volume: 4,746,404 52 Week Range: $29.3 - $78.53

2. Rocket Companies, Inc. (RKT): $9.39

Chief Executive Officer Jay Farner acquired 61,500 shares of this tech-driven real estate, mortgage, and e-Commerce business, paying $9.72 per share for a total amount of $597,710. Mr. Farner increased his stake by 3.80% to 1,681,707 shares with this purchase.

P/E: 4.04 Forward P/E: 7.34 Industry P/E: 7.45
P/S: 1.42 Price/Book: 1.78 EV/EBITDA: 4.26
Market Cap: $18.66B Avg. Daily Volume: 5,546,503 52 Week Range: $9.342 - $23.33

3. The Pennant Group, Inc. (PNTG): $16.92

Director Christopher R. Christensen acquired 27,332 shares of this healthcare services provider, paying $16.50 per share for a total amount of $450,958. These shares were purchased indirectly by Hobble Creek Investments, LLC.

P/E: 188 Forward P/E: 20.39 Industry P/E: 23.83
P/S: 1.1 Price/Book: 4.38 EV/EBITDA: 72.23
Market Cap: $482.72M Avg. Daily Volume: 178,269 52 Week Range: $11.38 - $44.23

4. Cadiz Inc. (CDZI): $1.93

Director Keith Brackpool acquired 200,000 shares of this natural resources development company, paying $1.97 per share for a total amount of $394,440. Mr. Brackpool increased his stake by 11.78% to 1,898,091 shares with this purchase.

P/E: N/A Forward P/E: -3.39 Industry P/E: 28.12
P/S: 173.67 Price/Book: 2.08 EV/EBITDA: -9.11
Market Cap: $97.95M Avg. Daily Volume: 347,943 52 Week Range: $1.66 - $14.69

5. Dave & Buster's Entertainment, Inc. (PLAY): $45.98

Chief Financial Officer Michael Quartieri acquired 5,000 shares of this entertainment and dining venue, paying $45.28 per share for a total amount of $226,400.

P/E: 20.81 Forward P/E: 12.13 Industry P/E: 1,038.42
P/S: 1.71 Price/Book: 8.09 EV/EBITDA: 11.56
Market Cap: $2.23B Avg. Daily Volume: 1,287,287 52 Week Range: $29.83 - $52.535

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. GXO Logistics, Inc. (GXO): $59.3

Director Bradley S. Jacobs sold 5,447,500 shares of this supply chain management solutions provider for $57.24, generating $311.81 million from the sale. These shares were sold indirectly by Jacobs Private Equity, LLC.

P/E: 44.92 Forward P/E: 18.42 Industry P/E: 12.97
P/S: 0.86 Price/Book: 2.89 EV/EBITDA: 16
Market Cap: $6.81B Avg. Daily Volume: 1,000,829 52 Week Range: $48.381 - $105.92

2. XPO Logistics, Inc. (XPO): $56.78

Chief Executive Officer Bradley S. Jacobs sold 5,447,500 shares of this supply chain management solutions provider for $55.80, generating $303.97 million from the sale. These shares were sold indirectly by Jacobs Private Equity, LLC.

P/E: 19.35 Forward P/E: 10.16 Industry P/E: 52.82
P/S: 0.51 Price/Book: 5.72 EV/EBITDA: 8.67
Market Cap: $6.52B Avg. Daily Volume: 1,716,167 52 Week Range: $56.71 - $90.78

3. Alphabet Inc. (GOOGL): $2545.06

Shares of Alphabet were sold by 2 insiders:

  • Director Brin Sergey sold 83,332 shares for $2595.15, generating $216.26 million from the sale.
  • Director John L. Hennessy sold 125 shares for $2585.72, generating $323,215 from the sale. These shares were sold indirectly by a trust.
P/E: 22.68 Forward P/E: 18.71 Industry P/E: 21.80
P/S: 6.52 Price/Book: 6.7 EV/EBITDA: 17.68
Market Cap: $1.68T Avg. Daily Volume: 1,547,717 52 Week Range: $2230.05 - $3042

4. Airbnb, Inc. (ABNB): $170.7

Shares of Airbnb were sold by 2 insiders:

  • Chairman - Samara & Airbnb.org Joseph Gebbia sold 250,000 shares for $169.44, generating $42.36 million from the sale. These shares were sold indirectly by a trust.
  • Director Belinda J. Johnson sold 20,000 shares for $163.19, generating $3.26 million from the sale.
P/E: N/A Forward P/E: 83.27 Industry P/E: 1,038.42
P/S: 18.31 Price/Book: 22.65 EV/EBITDA: 193.42
Market Cap: $109.74B Avg. Daily Volume: 6,154,141 52 Week Range: $129.71 - $212.584

5. ChargePoint Holdings, Inc. (CHPT): $15.25

Director Michael Linse sold 1,657,967 shares of this electric vehicle (EV) charging networks and charging solutions provider for $15.50, generating $25.69 million from the sale. These shares were sold indirectly by Linse Capital LLC.

P/E: N/A Forward P/E: -30.5 Industry P/E: 26.83
P/S: 21.26 Price/Book: 9.33 EV/EBITDA: -21.77
Market Cap: $5.12B Avg. Daily Volume: 9,392,067 52 Week Range: $11.211 - $36.86

You can view the full list of sales from this Insider Sales page.

Insiders Sell For Various Reasons But Only Buy For One Reason, They Expect The Stock To Go Up.

This is especially true for insiders of recent spinoffs. We do the hard work for you by combing through hundreds of insider purchases each year to find the best opportunities. Insiders sometimes buy to "signal" the market and make mistakes because of their myopic focus on their company/industry. We cut through the noise and use insider buying as an idea discovery tool.

Beyond insider buying, Inside Arbitrage also provides ideas and tools related to buybacks, spinoffs, SPACs and merger arbitrage. Click here to learn more.

This article was written by

Asif Suria profile picture
9.53K Followers
Comprehensive tools and detailed analysis for event-driven investors

I am an entrepreneur and investor with a focus on event driven strategies including merger arbitrage, spinoffs, (legal) insider trading, buybacks and SPACs. I was one of the earliest contributors on Seeking Alpha and started publishing here in 2005. For more than a decade I have been writing every week about M&A and interesting insider transactions. My work has been mentioned in Barron's, Dow Jones, BNN Bloomberg and other publications.  

I have been an active investor for more than two decades and my background in technology has helped me built tools that inform my investing process, especially as it relates to event-driven strategies that require updated data and processes. The focus on my Inside Arbitrage service is to provide investors with the right combination of tools and analysis to help them take advantage of strategies that can perform well across market cycles.  

Follow

Disclosure: I/we have a beneficial long position in the shares of WDAY, RKT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: I hold long positions in Workday (WDAY) and Rocket Companies (RKT). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.