A Board Member Bought 5,000 Shares of Adobe

Page 1 of 2

Amy Banse, who sits on the Board of Directors at Adobe Systems Incorporated (NASDAQ:ADBE), bought 5,000 shares of the stock on January 16th at an average price of $38.06. This is the first time Banse has bought shares in the company; she joined the Board in May 2012, however, and so we would expect any “courtesy purchases” of stock upon becoming a Board member to have occurred some time ago.

Insider purchases can be bullish signs (read more about studies on insider trading) as insiders should prefer to diversify rather than increase their exposure to the company, unless they are confident that the market is underestimating the company. We would note, however, that several insiders sold Adobe stock in December; of course, this may have been for diversification or even capital gains reasons (the stock is currently up 26% in the last year). See a history of insider sales at Adobe. Banse also serves as head of Comcast Ventures at Comcast Corporation (NASDAQ:CMSA).

VALUEACT CAPITAL

The fourth quarter of Adobe’s fiscal year ended in November, with the company reporting flat revenue from a year earlier; lower product revenue (products are by far the largest source of sales) was offset by strong growth in subscription revenues as well as increases in the services and support business. While cost of goods sold more or less reflected these trends, higher operating expenses caused operating income to decline 10% once we account for restructuring expenses in the third quarter of the last fiscal year.

Adobe Systems Incorporated now trades at 23 times trailing earnings, which seems high considering that operating income has been down. The sell-side expects better numbers in a couple years- the forward P/E, based on consensus forecasts for the fiscal year ending in November 2014, is 21- but even that valuation seems high and of course analysts are often too bullish.

Jeffrey Ubben’s ValueAct Capital had Adobe Systems Incorporated as one of its top stock picks at the end of September; the fund’s position of 31 million shares gave it over $1 billion invested in the company at that time (find more of Ubben’s favorite stocks and read more about ValueAct). Two other funds in our database of 13F filings with significant positions in Adobe were Brave Warrior Capital, managed by Glenn Greenberg (check out Greenberg’s other stock picks), and Ricky Sandler’s Eminence Capital.

How does Adobe compare to its peers?

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!