Benzinga - by Benzinga Insights, Benzinga Staff Writer.
A significant insider transaction involving the exercise of company stock options was reported on January 31, by Sara ChiuChu Liang Liu, Board Member at Super Micro Computer (NASDAQ:SMCI), as per the latest SEC filing.
What Happened: In an insider options sale disclosed in a Form 4 filing on Wednesday with the U.S. Securities and Exchange Commission, Liu, Board Member at Super Micro Computer, exercised stock options for 962 shares of SMCI. The transaction value amounted to $482,694.
As of Thursday morning, Super Micro Computer shares are up by 1.97%, with a current price of $540.02. This implies that Liu's 962 shares have a value of $482,694.
All You Need to Know 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.
A Deep Dive into Super Micro Computer's Financials Positive Revenue Trend: Examining Super Micro Computer's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 72.9% as of 31 December, 2023, showcasing a substantial increase in 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.
Evaluating Earnings Performance:
- Gross Margin: The company shows a low gross margin of 15.4%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.
- Earnings per Share (EPS): Super Micro Computer's EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 5.47.
In-Depth Valuation Examination:
- Price to Earnings (P/E) Ratio: The current P/E ratio of 41.44 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.
- Price to Sales (P/S) Ratio: The current P/S ratio of 3.27 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): With an impressive EV/EBITDA ratio of 33.58, Super Micro Computer demonstrates exemplary market valuation, surpassing industry averages.
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Understanding the Significance of Insider Transactions 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.
Considering the legal perspective, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, according to 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.
Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.
Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.
The Insider's Guide to Important 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 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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