Parallel49 Equity, a significant shareholder in CPI Card Group Inc . (NASDAQ:PMTS (TSX:PMTS)), has sold a portion of its holdings in the company. According to the latest filings, the investment firm offloaded a total of 120,534 shares at an average price of $18.228 each, amounting to roughly $2.2 million.
The transaction, which took place on July 5, 2024, was part of a stock repurchase agreement between the reporting person and the issuer, dating back to March 11, 2024. Following the sale, Parallel49 Equity's affiliated funds, Tricor Pacific Capital Partners (Fund IV), LP and Tricor Pacific Capital Partners (Fund IV) U.S., LP, reported remaining holdings of 3,894,942 and 2,299,035 shares of common stock in CPI Card Group Inc ., respectively.
The shares were sold indirectly through the Tricor funds, which are managed by Parallel49 Equity, ULC. The members of the investment committee responsible for the decision to sell the shares have disclaimed beneficial ownership of the sold shares, indicating that they do not have a personal stake in the transaction.
CPI Card Group Inc., known for its commercial printing services, has seen its stock being actively traded by significant shareholders, which is a typical occurrence in the financial markets. Such transactions are closely watched by investors for insights into insider confidence and potential shifts in company ownership.
The managing director of Parallel49 Equity, John Westerman, signed off on the transaction on behalf of the firm and its associated funds. The disclosed sale represents a notable change in the ownership structure of CPI Card Group Inc., and it remains to be seen how this will impact the company's stock performance in the future.
In other recent news, CPI Card Group Inc. has made significant strides despite facing a 7% decline in net sales for the first quarter of 2024. The company reported sequential growth in net sales, net income, and adjusted EBITDA, largely due to substantial growth in the prepaid business and card services. A new contract is expected to bolster sales through 2029 as CPI Card Group expands into digital solutions.
The company recently priced $285 million of 10.000% senior secured notes due 2029, with proceeds aimed at redeeming all outstanding 8.625% senior secured notes due 2026. Roth/MKM maintained its Buy rating on CPI Card Group, expressing optimism for the company's growth prospects, particularly with the anticipated resolution of the excess card inventory by 2024.
CPI Card Group's robust cash reserve of $17.1 million and no borrowings against their $75 million ABL revolver suggest financial stability. These recent developments reflect CPI Card Group's strategic approach to navigating sales decline and its commitment to long-term growth.
InvestingPro Insights
As CPI Card Group Inc. (NASDAQ:PMTS) experiences changes in its ownership structure, with Parallel49 Equity divesting a portion of its stake, investors are keen to understand the financial health and market performance of the company. According to InvestingPro data, CPI Card Group Inc. boasts a market capitalization of $323 million, reflecting its size and significance within the industry. The company's P/E ratio stands at 17.71, which speaks to its earnings relative to its share price and can be a useful indicator when assessing value.
InvestingPro Tips highlight that CPI Card Group Inc. is trading near its 52-week high, with a price percentage of 98.03% of this high, indicating strong market confidence. Additionally, the company's liquid assets surpass its short-term obligations, suggesting a robust financial position for managing its liabilities. This could reassure investors about the company's ability to meet its immediate financial commitments.
For those looking to delve deeper into CPI Card Group Inc.'s financials and market performance, additional insights are available on InvestingPro. There are 6 more InvestingPro Tips that could provide valuable guidance, including an analysis of the company's profitability and stock price trends over various periods. For access to these insights, investors can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering a comprehensive toolset for informed decision-making.
With the recent transaction by a significant shareholder and the positive indicators reflected in the company's financial metrics, CPI Card Group Inc. remains a point of interest in the market. Investors will undoubtedly continue to monitor the impact of ownership shifts on the company's future performance.
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