Roxanne Austin Purchases $1.53 Million Worth of CrowdStrike – Insider Weekends

One of the leading cybersecurity companies, CrowdStrike Holdings (CRWD), is known for its numerous products that protect not only individual customers, but also large businesses and governments. CrowdStrike has aided the U.S. government in uncovering and charging criminals in various hacking cases, such as the charging of five Chinese military hackers in 2014, but also helped with linking North Korea to the famous Sony Pictures hack in 2015.

Founded in 2011, the company is currently led by one of its co-founders, George Kurtz. CrowdStrike’s Chief Security Officer, Shawn Henry, has been with the company since 2012 and was formerly an Executive Assistance Director at the FBI.

We saw a series of insider purchases of CrowdStrike in late December 2022 by Director Roxanne Austin, and briefly mentioned them in our ChatGPT article, but didn’t delve too deep into the company at that time. Ms. Austin bought stock once more in early January, but did not file the Form 4 for the purchase until this week. Nevertheless, despite this transaction being filed late, we still found CrowdStrike worthy of a closer look.

CrowdStrike’s main product is the CrowdStrike Falcon, which uses artificial intelligence to detect and prevent possible threats from hackers and other sorts of data breaches. The product is constantly fed data about cybersecurity and other threat intelligence, allowing the program to fight both malware and non-malware related attacks on a variety of devices.

The CrowdStrike Falcon is also hosted on the cloud – which eliminates the need for customers to purchase hardware or other implementation devices.

CrowdStrike is a rapidly growing company, and following its IPO in mid-2019 at a price of $34, the stock hit a peak of over $280 during the pandemic. Much as we saw with Align Technology (ALGN), insiders of CrowdStrike were consistently selling stock, including Ms. Austin. The sales continued throughout 2021, and well into 2022, as seen in the screenshots below:

By the time Ms. Austin made her recent purchases, the stock price had fallen to around $99. CrowdStrike has slightly rebounded since that purchase, currently sitting at around $114 per share. While the stock has been declining, CrowdStrike has been rapidly growing revenue with trailing twelve month revenue up nearly 60% year-over-year. Forward EBITDA growth rates are also extremely attractive, sitting at around 80%. The company continues to report net losses but most of that is related to large stock-based compensation paid to employees – roughly $466 million in the trailing twelve months. As a result, free cash flow is actually positive.

While fourth quarter and fiscal year results are yet to be released, we can take a look at CrowdStrike’s Q3 2023 results (ended on October 31, 2022) to see how the company has been performing. As mentioned earlier, the company is growing very rapidly, and annual recurring revenue (derived primarily from subscriptions to the CrowdStrike Falcon service) grew to $2.34 billion as of October 31, 2022 – a 54% increase YoY. Subscription gross margin did decrease slightly on a QoQ basis, from 76% to 75%, and net loss for the quarter also grew to $55 million, compared to $50.5 million in Q3 2022. CrowdStrike managed to add 1,460 net new subscription customers for the quarter and nearly 60% of all customers had purchased at least 5 different modules of the CrowdStrike Falcon service.

The market has been willing to pay pretty big multiples for this growth. Non-GAAP P/E is currently 83.39 and the Price/Sales ratio is 13.01. The company has a strong balance sheet with over $1.7 billion in net cash. By most metrics, CrowdStrike is an incredibly attractive company, but the high valuation coupled with the big rally in tech stocks in recent weeks gives us pause. We’ll revisit the company after CrowdStrike announces fourth quarter and fiscal year 2023 (ended on January 31, 2023) results on March 7th.

Welcome to edition 670 of Insider Weekends. Insider buying increased last week with insiders purchasing $80.07 million of stock compared to $43.73 million in the week prior. Selling also increased to $1.56 billion compared to $1.34 million 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 dropped to 19.48. In other words, insiders sold more than 19 times as much stock as they purchased. The Sell/Buy ratio this week was favorable compared to the prior week when the ratio stood at 30.64.

Notable Insider Buys:

1. Annexon, Inc. (ANNX): $5.95

Director Muneer A. Satter acquired 2,647,058 shares of this clinical-stage biopharmaceutical company, paying $6.80 per share for a total amount of $17.99 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Annexon, Inc. here.

2. Cimpress plc (CMPR): $37.85

CEO, Chairman Robert S. Keane acquired 69,456 shares of this printing products company, paying $37.48 per share for a total amount of $2.6 million. These shares were purchased indirectly by the Keane Family Foundation.

You can view the list of recent insider transactions for Cimpress plc here.

3. PayPal Holdings, Inc. (PYPL): $74.66

President and CEO Daniel H. Schulman acquired 26,065 shares of PayPal, paying $76.17 per share for a total amount of $1.99 million. Mr. Schulman increased his stake by 7.06% to 395,351 shares with this purchase.

You can view the list of recent insider transactions for PayPal Holdings, Inc. here.

4. CrowdStrike Holdings, Inc. (CRWD): $114.25

Director Roxanne S. Austin acquired 15,500 shares of this cloud-delivered protection provider, paying $99.00 per share for a total amount of $1.53 million. Ms. Austin increased her stake by 15.44% to 115,919 shares with this purchase.

You can view the list of recent insider transactions for CrowdStrike Holdings, Inc. here.

5. Fidelity National Information Services, Inc. (FIS): $69.5

Shares of this payment solutions provider were acquired by 7 insiders:

• Director Brian T. Shea acquired 2,300 shares, paying $68.72 per share for a total amount of $158,056. Mr. Shea increased his stake by 35.90% to 8,707 shares with this purchase.
• Director Louise M. Parent acquired 2,247 shares, paying $66.99 per share for a total amount of $150,529. Mr. Parent increased his stake by 36.96% to 8,326 shares with this purchase.
• Director Kenneth T. Lamneck acquired 2,246 shares, paying $66.79 per share for a total amount of $150,004.
• Director Jeffrey A. Goldstein acquired 2,224 shares, paying $67.55 per share for a total amount of $150,231. Mr. Goldstein increased his stake by 100.09% to 4,446 shares with this purchase.
• Director Vijay D’Silva acquired 2,210 shares, paying $66.88 per share for a total amount of $147,805.
• Director Ellen R. Alemany acquired 2,200 shares, paying $67.09 per share for a total amount of $147,589.
• Director James B. Stallings acquired 2,200 shares, paying $68.45 per share for a total amount of $150,597. Mr. Stallings increased his stake by 16.43% to 15,592 shares with this purchase.

You can view the list of recent insider transactions for Fidelity National Information Services, Inc. here.

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

Notable Insider Sales:

1. Airbnb, Inc. (ABNB): $131.6

Shares of Airbnb were sold by 3 insiders:

• Director Joseph Gebbia sold 499,999 shares for $136.78, generating $68.39 million from the sale. These shares were sold indirectly by a trust.
• Chief Accounting Officer David C. Bernstein sold 39,798 shares for $134.67, generating $5.36 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Chief Technology Officer Aristotle N. Balogh sold 2,500 shares for $130.00, generating $325,000 from the sale.

You can view the list of recent insider transactions for Airbnb, Inc. here.

2. Boyd Gaming Corporation (BYD): $66.19

Shares of this multi-jurisdictional gaming company were sold by 2 insiders:

• Co-Executive Chair William S. Boyd sold 434,000 shares for $66.14, generating $28.7 million from the sale. These shares were sold indirectly by a trust.
• Executive Vice President Ted Bogich sold 30,433 shares for $67.32, generating $2.05 million from the sale.

You can view the list of recent insider transactions for Boyd Gaming Corporation here.

3. Paylocity Holding Corporation (PCTY): $209.31

Shares of this software application company were sold by 3 insiders:

• Director Steven I. Sarowitz sold 75,000 shares for $216.81, generating $16.26 million from the sale.
• President and Co-CEO Toby J. Williams sold 8,000 shares for $217.63, generating $1.74 million from the sale.
• CFO and Treasurer Ryan Glenn sold 1,250 shares for $214.95, generating $268,687 from the sale. 246 of these shares were sold as a result of exercising options immediately prior tp the sale.

You can view the list of recent insider transactions for Paylocity Holding Corporation here.

4. Atlassian Corporation (TEAM): $168.56

Shares of this software application company were sold by 5 insiders:

• Co-CEO, Co-Founder Michael Cannon-Brookes sold 51,684 shares for $176.60, generating $9.13 million from the sale. These shares were sold indirectly by a trust.
• President Anutthara Bharadwaj sold 1,412 shares for $180.78, generating $255,267 from the sale.
• Chief Revenue Officer Cameron Deatsch sold 902 shares for $180.78, generating $163,067 from the sale.
• Principal Accounting Officer Gene Liu sold 238 shares for $180.79, generating $43,029 from the sale.

You can view the list of recent insider transactions for Atlassian Corporation here.

5. BorgWarner Inc. (BWA): $50.43

Shares of this auto parts company were sold by 7 insiders:

• President and CEO Frederic Lissalde sold 150,000 shares for $49.25, generating $7.39 million from the sale.
• EVP & Chief Financial Officer Kevin Nowlan sold 44,154 shares for $50.01, generating $2.21 million from the sale.
• Vice President Joseph F. Fadool sold 36,751 shares for $49.17, generating $1.81 million from the sale.
• EVP, CAO, Gen Counsel & Secretary Tonit M. Calaway sold 14,026 shares for $49.59, generating $695,555 from the sale.
• VP & Controller Craig Aaron sold 9,638 shares for $48.29, generating $465,383 from the sale.
• VP & Treasurer Daniel Etue sold 6,000 shares for $49.16, generating $294,971 from the sale.
• Vice President Stefan Demmerle sold 4,000 shares for $50.00, generating $199,985 from the sale.

You can view the list of recent insider transactions for BorgWarner Inc. here.

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

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer: I hold a long position in Atlassian (TEAM) and long exposure through options in Airbnb (ABNB). 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.