Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Disclosed on December 7, Sara ChiuChu Liang Liu, Director at Super Micro Computer (NASDAQ:SMCI), executed a substantial insider sell as per the latest SEC filing.
What Happened: Liu's recent Form 4 filing with the U.S. Securities and Exchange Commission on Thursday unveiled the sale of 50,000 shares of Super Micro Computer. The total transaction value is $12,608,750.
Super Micro Computer shares are trading up 1.87% at $260.95 at the time of this writing on Friday morning.
About Super Micro Computer Super Micro Computer Inc provides high-performance server technology services to cloud computing, data center, Big Data, high-performance computing, and "Internet of Things" embedded markets. Its solutions include server, storage, blade and workstations to full racks, networking devices, and server management software. The firm follows a modular architectural approach, which provides flexibility to deliver customized solutions. The Company operates in one operating segment that develops and provides high-performance server solutions based upon an innovative, modular and open-standard architecture. More than half of the firm's revenue is generated in the United States, with the rest coming from Europe, Asia, and other regions.
Super Micro Computer: A Financial Overview Revenue Growth: Super Micro Computer's remarkable performance in 3 months is evident. As of 30 September, 2023, the company achieved an impressive revenue growth rate of 14.45%. This signifies a substantial increase in the company's top-line earnings. When compared to others in the Information Technology sector, the company excelled with a growth rate higher than the average among peers.
Profitability Metrics:
- Gross Margin: With a low gross margin of 16.69%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.
- Earnings per Share (EPS): Super Micro Computer's EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 2.96.
Insights into Valuation Metrics:
- Price to Earnings (P/E) Ratio: The current P/E ratio of 23.65 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.
- Price to Sales (P/S) Ratio: The current P/S ratio of 1.96 is above industry norms, reflecting an elevated valuation for Super Micro Computer's stock and potential overvaluation based on sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Super Micro Computer's EV/EBITDA ratio, surpassing industry averages at 18.53, positions it with an above-average valuation in the market.
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Uncovering the Importance of Insider Activity In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.
Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.
However, insider sells may not always signal a bearish view and can be influenced by various factors.
Transaction Codes Worth Your Attention In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously outlined in Table I of the Form 4 filing. A P in Box 3 indicates 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 Super Micro Computer's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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