On August 18, 2023, Jure Sola, Chairman and CEO of Sanmina Corp (SANM, Financial), sold 129,762 shares of the company. This move is part of a series of transactions made by the insider over the past year, which have seen a total of 349,312 shares sold and no shares purchased.
Jure Sola has been with Sanmina Corp for over 30 years, serving in various leadership roles before becoming Chairman and CEO. Under his leadership, Sanmina Corp has grown into a leading integrated manufacturing solutions provider. The company specializes in complex components and comprehensive end-to-end supply chain solutions for the world's most innovative electronic and mechanical technology companies.
The insider's recent sell-off has raised questions among investors and market watchers. To understand the implications of this move, it's essential to analyze the insider buy/sell trends and their relationship with the stock price.
The insider transaction history for Sanmina Corp shows a clear trend of insider selling over the past year, with 10 insider sells and no insider buys. This trend could indicate that insiders believe the stock is overvalued or that they are taking profits after a period of price appreciation. However, it's also important to note that insider selling can occur for various reasons, including personal financial needs or portfolio diversification.
On the day of the insider's recent sell, Sanmina Corp's shares were trading at $54.2, giving the company a market cap of $3.104 billion. The price-earnings ratio stood at 10.37, lower than both the industry median of 20.83 and the company's historical median price-earnings ratio. This suggests that the stock is undervalued compared to its peers and its own historical valuation.
The GuruFocus Value, an intrinsic value estimate developed by GuruFocus, further supports this view. With a price of $54.2 and a GuruFocus Value of $60.28, Sanmina Corp has a price-to-GF-Value ratio of 0.9, indicating that the stock is modestly undervalued. The GF Value is calculated based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates from Morningstar analysts.
In conclusion, while the insider's recent sell-off may raise eyebrows, the stock's valuation metrics suggest that Sanmina Corp is still undervalued. Investors should keep a close eye on the company's fundamentals and future performance to make informed investment decisions.
