Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Paul Lundstrom, Chief Financial Officer at Flex (NASDAQ:FLEX), disclosed an insider sell on May 10, according to a recent SEC filing.
What Happened: Lundstrom's recent Form 4 filing with the U.S. Securities and Exchange Commission on Friday unveiled the sale of 35,733 shares of Flex. The total transaction value is $1,023,625.
As of Friday morning, Flex shares are up by 0.94%, currently priced at $28.98.
Unveiling the Story Behind 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.
Breaking Down Flex's Financial Performance 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. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Information Technology sector.
Analyzing Profitability Metrics:
- Gross Margin: The company shows a low gross margin of 9.04%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.
- Earnings per Share (EPS): Flex's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.937879.
Exploring Valuation Metrics Landscape:
- 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: With a lower-than-average P/S ratio of 0.48, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 9.48, Flex presents a potential value opportunity, as investors are paying less for each unit of EBITDA.
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Illuminating the Importance of Insider Transactions Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.
In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.
Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.
Transaction Codes Worth Your Attention 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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