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Three Insider Purchases at Nasdaq – Insider Weekends

  • October 29, 2023

Nasdaq (NDAQ): $47.59

Market Cap: $23.38B

Enterprise Value: $27.90B

Key Insights

  • The magnificent seven (Apple, Microsoft, Nvidia, etc.) have had a wonderful year despite recent weakness, but the exchange that hosts them, Nasdaq (NDAQ), has not been so fortunate and is down nearly 22% this year.
  • Nasdaq continues to grow revenue and earnings mid-single digits but the rate of growth is slower than other exchanges like CME Group (CME).
  • The large $10.5 billion acquisition of Adenza from Thoma Bravo that is expected to close by year end will leave Nasdaq with a more leveraged balance sheet.
  • The company increased its dividend by 10% this year, increased its stock buyback authorization to $2 billion and three different insiders including two directors and the CEO have purchased shares in the last three months.
  • The stock is reasonably priced at 13.56 times forward EV/EBITDA. Unless we run into a collapse in financial markets, it should be a steady performer over the years.

We last wrote about Nasdaq (NDAQ) in August following the first insider purchase by CEO Adena Friedman in over a decade. By way of discussing the various business units of the company we wrote the following:

The Nasdaq business has three different business segments: Market Platforms, Capital Access Platforms, and Anti-Financial Crime, all of which were created in 2022 as part of a larger restructuring in the business and its products.

The Market Platforms business segment covers the Trading Services and Marketplace Technology products that Nasdaq offers, which essentially deal with the various exchanges that the Nasdaq corporation owns and manages. As of December 31, 2022, a total of 4,230 companies listed securities on The Nasdaq Stock Market. The Capital Access Platforms segment covers most of the data services that the Nasdaq corporation offers, whereas the Anti-Financial Crime segment operates various financial services that seek to preserve the integrity of the financial world.

What drew our attention to the company this week was the generally attractive profit margins that many stock exchange operators and financial data services like the Nasdaq enjoy. The business’s gross margin is a fairly strong 59.54%, and the company manages to squeeze out an 18.07% net margin from that number. Growth for the company has been moderating. For 2022 the company managed to grow revenue by 5.8% to $6.23 billion, which after transaction rebates and other transaction-based expenses, led to a total revenue of $3.58 billion for the year.

Graph of portions of revenue for each business segment
The Percentage of Revenues (excluding Transaction-Based Expenses) by Business Segment For Fiscal 2022

As for more recent quarterly results (Q2 2023), Nasdaq saw total revenue of $1.43 billion, which represented a decrease of 7.7% when compared to Q2 2022. However, after all transaction-based expenses were applied, revenue for the quarter sat at around $925 million, which was a 3.6% increase QoQ. However, operating expenses increased by 12.9%, leading to net income of $267 million, which represented a 13% decrease when compared to Q2 2022.

This week’s insider purchase came from Nasdaq’s Chair and CEO, Adena T. Friedman, who after being named CEO in January 2017, became the first woman to lead a global stock exchange. Ms. Friedman had originally joined the company in 1993, and later joined The Carlyle Group, serving as the CFO from 2011 to 2014.

Ms. Friendman then rejoined Nasdaq as President and COO, until she took on the role of CEO three years later. Ms. Friedman’s purchase comes at an interesting time for the company. In June 2023 Nasdaq the purchase of risk management. and regulatory software company Adenza from Thomas Bravo (a software investment firm) in a deal valued at $10.5 billion. This acquisition would add value by contributing heavily to Nasdaq’s Marketplace Technology and Anti-Financial Crime products/business segments.

Since that article the stock has dropped 4% and we saw two other insiders purchase shares. The company reported Q2 2023 results and revenue in the third quarter grew 6% with the anti-financial crimes division posting the strongest growth at 21%. GAAP earnings grew just 2% to $0.60 and non-GAAP earnings grew 4% to $0.71. The company generated $1.6 billion in free cash flow over the trailing twelve months.

Nasdaq expects to pay for its large Adenza acquisition through a combination of cash and debt. The $2 billion share repurchase authorization will help offset some of the dilution from this deal when it closes in Q4 2023.

Exchanges are good steady businesses with good profits margins. The Nasdaq’s growth and margins are nowhere as strong as CME Group (CME) but they are growing faster than Intercontinental Exchange (ICE). In fact Roper Technologies (ROP) and DoorDash (DASH) both moved their listing to the Nasdaq and four out of the five largest U.S. IPOs through Q3 2023 were on the Nasdaq (NDAQ). We previous covered Roper Technologies in the July 2021 Special Situations newsletter.

If I had to pick an exchange to invest in, it would be the CME Group, a company we wrote about last November. Nasdaq would be a close second and I am going to add the company to my internal watchlist.


Welcome to edition 705 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $26.41 million of stock compared to $160.07 million in the week prior. Selling also increased to $177.55 million compared to $388.11 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 the total insider purchases that week. The adjusted ratio for last week went up to 6.72. In other words, insiders sold almost 7 times as much stock as they purchased. This week, the Sell/Buy ratio was unfavorable, compared to the prior week when the ratio stood at 2.42.

Notable Insider Buys:

1. Asana, Inc. (ASAN): $18.07

President, CEO, & Chair Dustin A. Moskovitz acquired 123,547 shares of this work management platform, paying $17.50 per share for a total amount of $2.16 million. Mr. Moskovitz increased his stake by 0.26% to 47,661,421 shares with this purchase.

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

P/E: -11.73Forward P/E: -72.28Industry P/E: 22.25
P/S: 6.54Price/Book: 11.87EV/EBITDA: -11.71
Market Cap: $3.97BAvg. Daily Volume: 2,646,68252 Week Range: $11.32 – $26.27

2. Northern Trust Corporation (NTRS): $63.54

Shares of this asset management company were acquired by 3 insiders:

  • Chairman and CEO Michael O’Grady acquired 20,000 shares, paying $65.10 per share for a total amount of $1.3 million.
  • EVP and General Counsel Susan Cohen Levy acquired 5,000 shares, paying $64.41 per share for a total amount of $322,050. Ms. Levy increased her stake by 19.17% to 31,085 shares with this purchase.
  • EVP & Chief Financial Officer Jason J. Tyler acquired 1,750 shares, paying $64.12 per share for a total amount of $112,219. Mr. Tyler increased his stake by 4.41% to 41,477 shares with this purchase.

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

P/E: 11.39Forward P/E: 10.75Industry P/E: 8.93
P/S: 1.96Price/Book: 1.2EV/EBITDA: -3.84
Market Cap: $13.16BAvg. Daily Volume: 1,319,46452 Week Range: $62.44 – $100.25

3. Nasdaq, Inc. (NDAQ): $47.59

Director Johan Torgeby acquired 14,000 shares of Nasdaq, paying $50.42 per share for a total amount of $705,880. Mr. Torgeby increased his stake by 165.37% to 22,466 shares with this purchase.

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

P/E: 21.34Forward P/E: 16.41Industry P/E: 8.93
P/S: 3.9Price/Book: 3.62EV/EBITDA: 13.78
Market Cap: $23.38BAvg. Daily Volume: 2,422,71252 Week Range: $46.88 – $69.22

4. Tourmaline Bio, Inc. (TRML): $14

Shares of this biotech company were acquired by 4 insiders:

  • Director Caley Castelein acquired 20,000 shares, paying $14.03 per share for a total amount of $280,584. Mr. Castelein increased his stake by 4.03% to 516,519 shares with this purchase.
  • CEO Sandeep Chidambar Kulkarni acquired 9,650 shares, paying $11.49 per share for a total amount of $110,912. Mr. Kulkarni increased his stake by 1.35% to 725,735 shares with this purchase.
  • Director Aaron Kantoff acquired 7,500 shares, paying $11.86 per share for a total amount of $88,950. Mr. Kantoff increased his stake by 19.79% to 45,391 shares with this purchase.
  • Director Parvinder Thiara acquired 7,000 shares, paying $11.08 per share for a total amount of $77,540. Mr. Thiara increased his stake by 9.24% to 82,782 shares with this purchase.

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

P/E: N/AForward P/E: N/AIndustry P/E: 25.62
P/S: N/APrice/Book: N/AEV/EBITDA: N/A
Market Cap: $Avg. Daily Volume: 24,43152 Week Range: $8.9 – $32.9

5. M&T Bank Corporation (MTB): $108.94

Sr. EVP & CFO Daryl N. Bible acquired 5,000 shares of this regional bank, paying $111.04 per share for a total amount of $555,218. Mr. Bible increased his stake by 17.94% to 32,876 shares with this purchase.

You can view the list of recent insider transactions for M&T Bank Corporation here.

P/E: 6.25Forward P/E: 7.33Industry P/E: 8.93
P/S: 1.94Price/Book: 0.75EV/EBITDA: 1.03
Market Cap: $18.08BAvg. Daily Volume: 939,87152 Week Range: $108.53 – $172.59

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

Notable Insider Sales:

1. FirstCash Holdings, Inc. (FCFS): $107.1

Director Douglas Richard Rippel sold 194,560 shares of this retail pawn store operator for $105.17, generating $20.46 million from the sale. These shares were sold indirectly by a trust.

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

P/E: 21.46Forward P/E: 15.77Industry P/E: 8.93
P/S: 1.58Price/Book: 2.53EV/EBITDA: 7.67
Market Cap: $4.83BAvg. Daily Volume: 198,38552 Week Range: $85.3 – $111.84

2. Salesforce, Inc. (CRM): $196.57

Shares of this cloud software company were sold by 6 insiders:

  • Chair and CEO Marc Benioff sold 75,000 shares for $200.80, generating $15.06 million from the sale.
  • Pres/Chief Engineering Officer Srinivas Tallapragada sold 10,561 shares for $199.60, generating $2.11 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President and COO Brian Millham sold 2,400 shares for $200.57, generating $481,358 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Co-Founder and CTO Parker Harris sold 1,811 shares for $202.88, generating $367,411 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President and CFO Amy E. Weaver sold 510 shares for $200.97, generating $102,497 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • EVP & Chief Accounting Officer Sundeep G. Reddy sold 164 shares for $200.97, generating $32,960 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

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

P/E: 123.63Forward P/E: 22.19Industry P/E: N/A
P/S: 5.78Price/Book: 3.3EV/EBITDA: 25.02
Market Cap: $191.26BAvg. Daily Volume: 4,696,63252 Week Range: $126.34 – $238.22

3. Atlassian Corporation (TEAM): $176.46

Shares of this software application company were sold by 2 insiders:

  • Co-CEO, Co-Founder Michael Cannon-Brookes sold 41,205 shares for $183.63, generating $7.57 million from the sale. These shares were sold indirectly by a trust.
  • President Anutthara Bharadwaj sold 2,470 shares for $191.19, generating $472,239 from the sale.

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

P/E: -92.87Forward P/E: 61.48Industry P/E: 22.25
P/S: 12.89Price/Book: 69.42EV/EBITDA: -237.66
Market Cap: $45.56BAvg. Daily Volume: 1,354,12952 Week Range: $113.855 – $215.77

4. Nuvalent, Inc. (NUVL): $50.96

Director Matthew Shair sold 91,700 shares of this biotech company for $50.70, generating $4.65 million from the sale.

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

P/E: N/AForward P/E: -18.2Industry P/E: 25.62
P/S: N/APrice/Book: 6.89EV/EBITDA: -25.55
Market Cap: $3.18BAvg. Daily Volume: 651,48952 Week Range: $23.095 – $65.5

5. Samsara Inc. (IOT): $22.21

Shares of this software infrastructure company were sold by 2 insiders:

  • See remarks John Bicket sold 90,295 shares for $23.00, generating $2.07 million from the sale. These shares were sold indirectly by a trust.
  • Chief Executive Officer Sanjit Biswas sold 89,800 shares for $23.00, generating $2.07 million from the sale. These shares were sold indirectly by a trust.

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

P/E: -48.5Forward P/E: 317.29Industry P/E: 22.25
P/S: 15.23Price/Book: 12.69EV/EBITDA: -43.45
Market Cap: $11.88BAvg. Daily Volume: 2,838,59352 Week Range: $8.42 – $32.41

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 long positions in Atlassian (TEAM). 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.