Matthew Jacobson, a director at Datadog (DDOG), recently bought 719,894 shares. The buy increased his holdings by nearly 6 percent, and came to a total cost just under $50 million.
This marks the first insider buy at the company in the past three years. Otherwise, company insiders, primarily executives, have been large and steady sellers of the stock since 2019. That’s fairly typical of an early-stage tech company.
Even with large amounts of sales over the past few years, insiders own 9.4 percent of shares.
The data monitoring company has seen shares lose two-thirds of their value in the past year, amid a repricing of anything tech related. While Datadog hasn’t earned a profit, it’s close to breakeven.
Plus, its revenues are up 61 percent over the past year. And the company has nearly $1 billion in net cash on the balance sheet. So chances are the company can survive in the current market environment.
Action to take: If the company can move to making a profit, the market will likely reward shareholders here. Buyers should look to start small and add to their stake on a down day for the stock.
For traders, shares look oversold and ready to move higher. The April 2023 $95 calls, last going for about $7.25, offer mid-to-high double-digit return potential on a move higher in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.