Benzinga - by Benzinga Insights, Benzinga Staff Writer.
It was reported on May 10, that David Scott Offer, EVP at Flex (NASDAQ:FLEX) executed a significant insider sell, according to an SEC filing.
What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Friday showed that Offer sold 34,097 shares of Flex. The total transaction amounted to $976,834.
As of Friday morning, Flex shares are up by 0.94%, currently priced at $28.98.
About Flex Flex Ltd is a contract manufacturing company providing comprehensive electronics design, manufacturing, and product management services to global electronics and technology companies. The company's operating segments include Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker. Flex Agility Solutions segment includes markets such as Communications, Enterprise and Cloud; Lifestyle; and Consumer Devices. Flex Reliability Solutions segment includes markets such as Automotive, Health Solutions, and Industrial. The Nextracker segment provides solar tracker technologies that optimize and increase energy production. The company's geographical segments include China, Mexico, the United States, Brazil, Malaysia, Hungary, and Others.
Flex: Delving into Financials Negative Revenue Trend: Examining Flex's financials over 3 months reveals challenges. As of 31 December, 2023, the company experienced a decline of approximately -8.42% in revenue growth, reflecting a decrease in top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Profitability Metrics: Unlocking Value
- Gross Margin: The company faces challenges with a low gross margin of 9.04%, suggesting potential difficulties in cost control and profitability compared to its peers.
- Earnings per Share (EPS): With an EPS below industry norms, Flex exhibits below-average bottom-line performance with a current EPS of 0.937879.
Evaluating Valuation:
- Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 19.1 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
- Price to Sales (P/S) Ratio: The P/S ratio of 0.48 is lower than the industry average, implying a discounted valuation for Flex's stock in relation to sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 9.48, Flex could be considered undervalued.
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Understanding the Significance of Insider Transactions It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.
In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.
When a company insider makes a new purchase, that is an indication that they expect the stock to rise.
Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.
Unlocking the Meaning of Transaction Codes For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Flex's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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