Palantir: Insider Sales And High Valuations Vs. Strong Operational Performance (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• I expected Palantir to underperform the S&P 500, and indeed, it has done so by 18.58% overall since my last update on the stock. I think this will continue.
• Revenues are growing well along with the backlog; customer counts and concentration are increasingly broadening out; higher quality recurring revenues are increasing; and margins have room to grow further.
• But despite this impressive operational performance, I am deterred by record high levels of insider sales, including large >25% of overall stake exits by 3 insiders.
• Valuations are also on the higher side vs historical levels and a higher-for-longer rates environment poses additional risk in this regard.
• My read of the technicals suggests continued underperformance vs the S&P 500 going ahead.

Read the full article here.