The huge drop we saw in most markets earlier this week triggered a large number of insider purchases and it was interesting to watch both the S&P 500 and the Nasdaq close in positive territory for the week. Growth stocks staged a big comeback and beaten down Chinese technology stocks saw their biggest one-day gains after the government seemed to soften its stance towards overseas listings and indicated its efforts to “rectify” technology companies would end soon.
The top 5 insider purchases listed in the post this week barely scratch the surface of the number of insider transactions we saw this week. We highlighted some of them including insider buying in the luxury real estate broker Douglas Elliman (DOUG) and the coconut water company Vita Coco (COCO), in three Twitter threads here, here and here. Douglas Elliman was spun out of the Vector Group (VGR) at the end of last year and at one point last week, the stock was down more than 45% post spin-off.
The largest purchase this week was by an independent director of construction management software company Procore Technologies (PCOR). Will Griffith acquired nearly $60 million worth of stock indirectly through one of the ICONIQ funds. ICONIQ is a San Francisco-based private asset management company with $83.5 billion in assets under management (as of 12/31/2021). The firm provides wealth management services to high net worth clients such as Mark Zuckerberg, Sheryl Sandberg, Jack Dorsey and Jeff Weiner. ICONIQ was founded by Divesh Makan, Michael Anders and Chad Boeding in 2011 and Will Griffith joined the firm in 2012. ICONIQ has been a 10% owner in various companies like Snowflake (SNOW), Fastly (FSLY), Datadog (DDOG) and Procore Technologies (PCOR). The company still has an 8% stake in SNOW and owns nearly a third of Procore Technologies. Given how much ICONIQ already holds of Procore, it is surprising to see them buy more on the open market.
Despite the rebound in Procore’s stock this week, it is still trading below where it went public at $67 per share in May 2021. Procore grew its fourth quarter 2021 revenue by 33% and for the full year 2021, it grew revenue by 29% to $515 million. For the full year 2022, the company expects a similar growth rate of between 28% and 29%. The growth story appears to be intact with Procore but like most SaaS companies, it is losing money on a GAAP basis. Free cash flow for 2021 was positive to the tune of $9 million and Q4 2021 free cash flow came in at $13 million. If the company manages to grow revenue by 29% this year, it is trading at a little over 12 times 2022 sales. Not exactly cheap even for a SaaS company growing its revenue by nearly 30% year-over-year but I will add the company to my “broken growth” watchlist, which was discussed in our January 2022 mid-month update and has now grown to over 40 companies.
Welcome to edition 611 of Insider Weekends. Insider buying decreased last week with insiders purchasing $189.49 million of stock compared to $198.06 million in the week prior. Selling also declined to $1.12 billion compared to $1.37 billion in the week prior.