Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Michael P Hartung, Group President at Flex (NASDAQ:FLEX), disclosed an insider sell on May 10, according to a recent SEC filing.
What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Friday showed that Hartung sold 31,407 shares of Flex. The total transaction amounted to $899,703.
During Friday's morning session, Flex shares 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.
Key Indicators: Flex's Financial Health Revenue Challenges: Flex's revenue growth over 3 months faced difficulties. As of 31 December, 2023, the company experienced a decline of approximately -8.42%. This indicates 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.
Insights into Profitability:
- 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.
Assessing Valuation Metrics:
- Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 19.1, Flex's stock is perceived as being overvalued in the market.
- 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): Flex's EV/EBITDA ratio at 9.48 suggests potential undervaluation, falling below industry averages.
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Why Pay Attention to Insider Transactions While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.
From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.
While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.
The Insider's Guide to Important Transaction Codes Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates 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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