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On September 12, 2023, Lisa Su, Chair, President & CEO of Advanced Micro Devices Inc (NASDAQ:AMD), sold 75,000 shares of the company. This move is part of a larger trend, as over the past year, the insider has sold a total of 450,000 shares and purchased none.
Lisa Su is a prominent figure in the tech industry, having been with AMD since 2012. She took over as CEO in 2014 and has since led the company to new heights. Under her leadership, AMD has become a major player in the semiconductor industry, competing with giants like Intel and Nvidia.
Advanced Micro Devices Inc is a global semiconductor company. It is engaged in offering x86 microprocessors, as standalone devices or as incorporated as an accelerated processing unit (APU), chipsets, and discrete graphics processing units (GPUs) for the consumer, commercial and professional graphics markets, and server and embedded processors, and semi-custom System-on-Chip (SoC) products and technology for game consoles.
The insider's recent sell-off raises questions about the company's current valuation and future prospects. On the day of the insider's recent sell, AMD shares were trading for $105.4 apiece, giving the company a market cap of $172.28 billion.
The insider transaction history for AMD shows a clear trend: over the past year, there have been 24 insider sells and no insider buys. This could be a signal that those with the most intimate knowledge of the company see limited upside or potential downside. However, it's also important to note that insiders may sell shares for reasons unrelated to the company's prospects, such as personal financial needs.
According to GuruFocus Value, AMD is currently modestly undervalued. With a price of $105.4 and a GuruFocus Value of $119.54, the stock has a price-to-GF-Value ratio of 0.88. The GF Value is an intrinsic value estimate that takes into account historical multiples, a GuruFocus adjustment factor based on past returns and growth, and future business performance estimates from Morningstar analysts.
While the insider's recent sell-off may raise eyebrows, it's important for investors to consider the broader context. AMD's modest undervaluation, according to GuruFocus Value, suggests that there may still be upside potential. However, the trend of insider selling could be a red flag. As always, investors should conduct their own due diligence and consider multiple factors before making investment decisions.
This article first appeared on GuruFocus.