Aswath Damodaran is not just another analyst with a spreadsheet. He is Professor of Finance at the Stern School of Business of New York University, a world expert on company valuations, and a man who has rightly won the soubriquet "dean of valuation." If there’s anyone who ought to know how much a company is worth, it’s him.
Nevertheless, in 2013, Damodaran looked at companies such as Tesla and Facebook, built serious models, used well-founded assumptions, and reached the conclusion that their values were much lower than their market prices. In other words, the model said, "Too expensive."
It wasn’t just a blunder, it was a lesson. Precisely because Damodaran knows how to evaluate companies, his blunder was a reminder that sometimes the most important thing in a business is the thing that is hardest to enter into a spreadsheet cell: the company’s story, the quality of its management, and its ability to change a market and not just participate in it.
Damodaran did not run away from that insight; he turned it into a book: "Narrative and Numbers." The numbers need a story and the story needs numbers.
This leads us to the question that interests us as investors: If even a master of valuations can miss what didn’t fit nicely into the model, what is an investor who doesn’t have time or a team of analysts supposed to do?
Hint: Look at what the people who know most about the company do with their own money. The key question is, what do the senior managers do after the company’s share price collapses?
Every day, the trading actions of company insiders are published, and most of them are no more than a footnote. But what happens when the share purchaser has a proven record of good timing, particularly when several people closest to the business buy at the same time?
Take Varonis Systems, a US-Israel cybersecurity company traded on Nasdaq. The company specializes in securing enterprise data, with an emphasis on where the critical data are located, who has access to them, who has too many permissions, and how to reduce the chances of a leak or attack will turn into an expensive incident.
At the end of 2002, Varonis’s share price slid from $73 previously to $16-17. The market was tired and suspicious and not really interested in cyber stories with a long horizon. But some of the people closest to the business read the map quite differently, and started buying shares on the open market. Among them were company co-founder, chairperson and CEO Yakov Faitelson, CFO and COO Guy Melamed, vice chairman of sales James O’Boyle, and director Avrohom Kess. Between them, the four bought shares to the tune of $2.2 million out of their own pockets.
At that time, Varonis itself accelerated a buyback of its own shares at $19 per share, for a total of $45 million. And then the share price rose, strongly. Within a year it was at $50 or more, and it turned out that those same senior managers also knew how to sell at the top.
That doesn’t make them prophets, but on the capital market anyone who buys at $17 and sells at $50 (a 200% return, five times the market return in that period) at least earns the right that we should look to see what he does next time around.
Small window of opportunity
The next round came in early 2026, when, after two disappointing quarters, Varonis’s share price fell to around $20. That was low enough for the market to lose patience, but on the other hand for Faitelson and Kess, two of the buyers of 2022, to go back to buying shares. They were joined by longstanding director John J. Gavin Jr and CTO David Bass. This time, the insiders invested a total of $1.2 million.
The company itself not only joined in the buying; it came along with a truck. In the first quarter of 2026, Varonis bought back a record volume of shares, at an average price of $25 per share, and for a total of over $130 million.
It’s important to understand the timing. After the release of the results for the fourth quarter of 2025, a small window of opportunity opened up in early February during which insiders could buy shares, subject to company policy and in the absence of unpublished insider information. If someone from inside the company wanted to buy after a disappointing report, he didn’t have much time to think about it.
On April 29, following the release of the first quarter results, the picture changed. Varonis reported growth of 27% in quarterly revenue to $173 million and raised its annual guidance. Suddenly, the share purchases by the insiders in February-March looked less like bravery and more like early reading of the map. Since then, the share price has climbed to over $36, giving a 70% return, seven times the market return in the period. That doesn’t guarantee anything, but it does tell a story: when the market lost faith, the people closest to the business, and the company itself, thought otherwise.
Similar but different
Something similar happened recently at Israeli data and digital analytics company Similarweb. On May 13, the company released its first quarter results, and at the same time announced that it was looking for a replacement for outgoing founder and CEO Or Offer. Investors saw a change of leadership, and perhaps the opening shot in a sale process, and the battered stock fell to $2.62.
When the trading window for insiders opened on May 18, they didn’t hang around. The first to buy was Offer himself, surprisingly, as he was preparing to vacate the CEO’s chair. He was joined by directors Tamar Rapaport-Dagim, Barak Eilam (former CEO of Nice), and Harel Beit-On. Together, they bought shares for about $1 million.
Less than a month later, Similarweb announced two multi-year contracts worth an aggregate $47 million, and the share price jumped to $5.43, 70% higher than the price paid by the insiders.
For all that, the patterns in the two cases are different. In the case of Varonis, the buyers had shown in the past that they were capable of spotting when the market was overdoing it, and in the two rounds of purchases they were joined by the company itself in aggressive share buybacks. In the case of Similarweb, it was actually the founder and outgoing CEO who was the first to put his hand in his pocket, followed by the directors. The message, however, is similar: to understand the signal you have ask who bought, who joined in, how much money was invested, and what’s happening behind the scenes.
So to revert to the lesson of Damodaran: Varonis and Similarweb remind us that sometimes the narrative isn’t written in the analysts’ report, but in the moves by the people closest to the business. That is no substitute for thought, just a shortcut to the point where thought should begin. Because sometimes the story behind the scenes tells us more than the most convincing model on the market.
The author is CEO of SmartLenses, which has developed a platform for understanding trading actions by insiders in public companies in the US, and advises investment managers on identifying unique investment ideas.
The above should not be seen as a recommendation or advice, and is no substitute for personal investment consultation that takes into account the needs and situation of each individual.
Published by Globes, Israel business news - en.globes.co.il - on June 24, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.