Benzinga - by Benzinga Insights, Benzinga Staff Writer.
King Sarah H, SVP at Darden Restaurants (NYSE:DRI), executed a substantial insider sell on December 21, according to an SEC filing.
What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Thursday outlined that H executed a sale of 4,286 shares of Darden Restaurants with a total value of $708,254.
As of Friday morning, Darden Restaurants shares are down by 0.0%, currently priced at $162.21.
All You Need to Know About Darden Restaurants Darden Restaurants is the largest restaurant operator in the U.S. full-service space, with consolidated revenue of $10.5 billion in fiscal 2023 resulting in 3%-4% full-service market share (per NRA data and our calculations). The company maintains a portfolio of 10 restaurant brands: Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Ruth's Chris, Yard House, The Capital Grille, Seasons 52, Eddie V's, Bahama Breeze, and The Capital Burger. Darden generates revenue almost exclusively from company-owned restaurants, though a small network of franchised restaurants and consumer-packaged goods sales through the traditional grocery channel contribute modestly. As of the end of its fiscal 2023, the company operated 1,914 restaurants in the U.S.
Breaking Down Darden Restaurants's Financial Performance Decline in Revenue: Over the 3 months period, Darden Restaurants faced challenges, resulting in a decline of approximately -0.12% in revenue growth as of 30 November, 2023. This signifies a reduction in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Discretionary sector.
Holistic Profitability Examination:
- Gross Margin: The company shows a low gross margin of 20.17%, suggesting potential challenges in cost control and profitability compared to its peers.
- Earnings per Share (EPS): Darden Restaurants's EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 1.77.
Financial Valuation:
- Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 19.64, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
- Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 1.79 suggests overvaluation in the eyes of investors, considering sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 14.57 is below the industry average, indicating that it may be relatively undervalued compared to peers.
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The Impact of Insider Transactions on Investments In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.
In the context of legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.
Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.
Exploring Key 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 Darden Restaurants's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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