Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Gary K Simmons, EVP & COO at Valero Energy (NYSE:VLO), executed a substantial insider sell on January 22, according to an SEC filing.
What Happened: After conducting a thorough analysis, Simmons sold 5,170 shares of Valero Energy. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The total transaction value is $647,464.
Monitoring the market, Valero Energy's shares up by 0.1% at $129.25 during Tuesday's morning.
Delving into Valero Energy's Background Valero Energy is one of the largest independent refiners in the United States. It operates 15 refineries with a total throughput capacity of 3.2 million barrels a day in the United States, Canada, and the United Kingdom. Valero also owns 12 ethanol plants with capacity of 1.6 billion gallons of ethanol a year and holds a 50% stake in Diamond Green Diesel, which has capacity to produce 1.2 billion gallons per year of renewable diesel.
Financial Insights: Valero Energy Negative Revenue Trend: Examining Valero Energy's financials over 3 months reveals challenges. As of 30 September, 2023, the company experienced a decline of approximately -13.61% in revenue growth, reflecting a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Energy sector.
Profitability Metrics:
- Gross Margin: The company shows a low gross margin of 9.79%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.
- Earnings per Share (EPS): Valero Energy's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 7.49.
Evaluating Valuation:
- Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 4.4, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
- Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.31, which is lower than the industry average. This suggests a possible undervaluation based on 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 2.8, Valero Energy could be considered undervalued.
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Why Insider Transactions Are Important Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.
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 When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates 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 Valero Energy's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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