Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Revealing a significant insider sell on March 14, Daniel Wendler, Chief Accounting Officer at Flex (NASDAQ:FLEX), as per the latest SEC filing.
What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Wendler sold 1,860 shares of Flex. The total transaction amounted to $53,728.
Flex shares are trading up 0.14% at $28.79 at the time of this writing on Thursday morning.
About 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.
Financial Insights: Flex Negative Revenue Trend: Examining Flex's financials over 3 months reveals challenges. As of 31 December, 2023, the company experienced a decline of approximately -8.42% in revenue growth, reflecting a decrease in top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Navigating Financial Profits:
- 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 is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.46.
Valuation Metrics:
- Price to Earnings (P/E) Ratio: The P/E ratio of 17.11 is lower than the industry average, implying a discounted valuation for Flex's stock.
- Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.44, 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): At 7.28, Flex's EV/EBITDA ratio reflects a below-par valuation compared to industry averages signalling undervaluation
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Why Insider Transactions Are Key in Investment Decisions While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.
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 To Focus On When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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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