We’ve been on the lookout for outsized insider buys as the market swooned. Well, there is insider buying and then there is insider buying. This week we have a pair of major dollar purchases that dominate the field.
Alteryx, Inc. (AYX) Director Jeff Horing went all in to use a poker term. He bought 911,829 shares at $54.79 for nearly $50 million. (1) Amplitude, Inc. (AMPL) Director Patrick Grady also put an obscene amount of chips on the table. Grady acquired more than 2.5 million shares at $19.48, also for a touch under $50 million. (2)
Like we said, there are insider buys and then there are insider buys.
We don’t know about you but investing $50 million into anything either takes guts or confidence, most likely a bit of both. Hopefully, one day we’ll know how much of each is required.
Alteryx, Inc. (AYX) provides an end-to-end analytics platform for data analysts and scientists worldwide. Until last week’s buy, Director Horing was 100% sell, collecting more than $768 million. A little more than half of the windfall was Horing selling AYX. (3) That’s quite a change of heart.
Analysts have a one-year price target of $79.69 on the software application company. (4) As we type, Alteryx trades at $61.24. Earnings are only supposed to hit $0.02 in 2023 while they are expected to lose $0.63 in 2022. Meanwhile, sales are slated to hit $855.45 next year, up more than 19% compared to this year’s $715.68 million. (5)
Right now, the tech company trades at 7.67 times earnings (P/S). If Alteryx manages to hold its current P/S ratio and hits next year’s sales target, then AYX would trade at $109.60 per share.
Amplitude, Inc. (AMPL) is a digital optimization software company with almost 1,600 customers, including Atlassian, Instacart, NBCUniversal, Shopify, and Under Armour. Amplitude Digital Optimization System makes critical data accessible and actionable to every team — unifying product, marketing, developers, and executive teams around a new depth of customer understanding and common visibility into what drives business outcomes.
AMPL recently disappointed investors with weaker than expected guidance for 2022. (5) The software company’s stock closed at $41.61 on February 16th. It opened at $26 the next day and went as low as $16.60 on February 18th.
Since IPOing in September 2021, insiders did nothing but sell, sell, unloading a total of $349 million. (6) And then Director Grady and Sequoia Capital stepped in, both investing more than $49 million. Grady had three previous transactions prior to last week’s splurge. All three were sells for a combined $40.56 million. (7)
Much like Director Grady, William Blair believes the company is a buying opportunity for investors saying, “the sell-off is an overreaction.” (8) As of today, the one-year price target is $36.33. (9). Amplitude is expected to lose money for the foreseeable future and will be dependent on sales and news.
Analysts believe revenue will reach $311.95 million in 2023, up from $232.02 million this year. (10) Right now, AMPL trades with a P/S ratio of 6.52. If it hits the street’s 2023 topline expectation, then the stock would trade at $34.59. It’s at $21.24 as of this keystroke.
Overall: Both Alteryx, Inc. (AYX) and Amplitude, Inc. (AMPL) appear to have some significant upside potential based on their 2023 revenue estimates and their current P/S ratios. The size of insider buys is absolutely eye-catching, especially in light of Director Jeff Horing and Director Patrick Grady big buys.
AYX and AMPL are tech companies that are appropriate for investors with above-average risk tolerance and at least an 18-month time horizon.
1 – https://www.secform4.com/insider-trading/1119324.htm
2 – https://www.secform4.com/insider-trading/1866692.htm
3 – https://www.secform4.com/insider-trading/1119324.htm
4 – https://finance.yahoo.com/quote/AYX?p=AYX
5 – https://www.fool.com/investing/2022/02/17/why-amplitude-stock-crashed-today/
6 – https://www.secform4.com/insider-trading/1866692.htm
7 – https://www.secform4.com/insider-trading/1700423.htm
8 – https://finance.yahoo.com/news/amplitude-plunges-pullback-buying-opportunity-143510469.html
9 – https://finance.yahoo.com/quote/AMPL?p=AMPL
10 – https://finance.yahoo.com/quote/AMPL/analysis?p=AMPL
