Director of Zurn Elkay Water Solutions Corp (NYSE:ZWS), Timothy J. Jahnke, has sold a total of 15,600 shares of the company's common stock, generating proceeds of $515,275. The transactions were carried out with prices ranging from $33.00 to $33.08, with the reported weighted average sale price being $33.0305 per share.
The sale took place on September 9, 2024, and was executed in accordance with a Rule 10b5-1 trading plan, as indicated in the footnotes of the transaction. Rule 10b5-1 plans allow company insiders to set up a predetermined schedule to sell stocks at a time when they are not in possession of material non-public information, thereby helping to avoid accusations of insider trading.
Following the sale, Jahnke still holds a significant stake in the company, owning 385,017 shares directly. Additionally, he has an indirect ownership of 200,000 shares through an irrevocable trust. This indicates a continued vested interest in the company's performance, despite the recent sale.
Investors often monitor insider transactions as they can provide insights into how the company's executives view the stock's value and future performance. However, it's important to consider that insider sales can occur for various reasons and may not necessarily reflect a negative outlook.
Zurn Elkay Water Solutions Corp, listed under the ticker symbol ZWS, specializes in general industrial machinery and equipment. The company, formerly known as Zurn Water Solutions Corp and Rexnord (NYSE:ZWS) Corp, is incorporated in Delaware and has its fiscal year end on December 31.
The sale was publicly reported in a Form 4 filing with the Securities and Exchange Commission, with the document signed by Jeffrey J. LaValle, under Power of Attorney for Timothy J. Jahnke, on September 11, 2024.
In other recent news, Zurn Water Solutions has been making notable strides in its financial performance. The company reported a robust growth in its second quarter, with a 20% increase in adjusted EBITDA and significant margin expansion. Core growth was marked at 3%, and the company generated $80 million in free cash flow. In addition, Zurn repurchased nearly 2 million shares, contributing to an EBITDA increase of $35 million for the first half of the year.
Baird has responded to these recent developments by raising its price target for Zurn to $37 from $36, while maintaining a neutral rating on the stock. The firm cited Zurn's better-than-expected margin results and the company's upgraded 2024 guidance as reasons for the adjustment. Baird also noted that Zurn's end markets are developing as anticipated, with growth in the Drinking Water sector balancing out performance in other areas.
Furthermore, the company's management has shown strong internal execution amidst a varied market environment, which has been a contributing factor to the gradual increase in estimates. Zurn is expected to surpass $250 million in free cash flow for the full year. These are recent developments that highlight Zurn's financial performance and strategic moves in the market.
InvestingPro Insights
As Zurn Elkay Water Solutions Corp's (NYSE:ZWS) director, Timothy Jahnke, parts with a portion of his holdings, recent data and analysis from InvestingPro may offer investors additional context to interpret this insider activity. Notably, the company is anticipated to witness an uptick in net income this year, as suggested by one of the InvestingPro Tips, which indicates a positive earnings outlook. This aligns with the fact that three analysts have recently revised their earnings estimates upwards for ZWS, reflecting a potentially stronger financial performance in the upcoming period.
From a valuation standpoint, ZWS is trading at a Price-to-Earnings (P/E) ratio of 41.16, which is considered high in absolute terms, hinting at a premium market valuation. However, when adjusted for near-term earnings growth, the P/E ratio stands at 37.4, coupled with a PEG ratio of just 0.27 for the last twelve months as of Q2 2024, suggesting that the stock may be more reasonably priced in relation to its growth prospects. This is reinforced by the company's solid gross profit margin of 44.27% over the same period, demonstrating its ability to maintain profitability.
Furthermore, the company's liquid assets surpass short-term obligations, which is a sign of financial stability. This financial health is also reflected in ZWS's moderate level of debt, as highlighted in the InvestingPro Tips. Such a balance sheet position could reassure investors about the company's ability to manage its financial obligations and invest in growth opportunities.
For those interested in more detailed analysis and additional insights, there are a total of 9 InvestingPro Tips available for Zurn Elkay Water Solutions Corp, which can be found at: https://www.investing.com/pro/ZWS. These tips can provide further guidance on the company's stock performance and financial health, aiding investors in making more informed decisions.
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