Benzinga - by Benzinga Insights, Benzinga Staff Writer.
It was reported on December 7, that SHERMAN TUAN, Board Member at Super Micro Computer (NASDAQ:SMCI) executed a significant insider sell, according to an SEC filing.
What Happened: TUAN's recent Form 4 filing with the U.S. Securities and Exchange Commission on Thursday unveiled the sale of 500 shares of Super Micro Computer. The total transaction value is $126,087.
Super Micro Computer shares are trading up 1.87% at $260.95 at the time of this writing on Friday morning.
Delving into Super Micro Computer's Background 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.
Financial Insights: Super Micro Computer Revenue Growth: Over the 3 months period, Super Micro Computer showcased positive performance, achieving a revenue growth rate of 14.45% as of 30 September, 2023. This reflects 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: The company issues a cost efficiency warning with a low gross margin of 16.69%, indicating potential difficulties in maintaining profitability compared to its peers.
- Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 2.96, Super Micro Computer showcases strong earnings per share.
Analyzing Market Valuation:
- Price to Earnings (P/E) Ratio: The P/E ratio of 23.65 is lower than the industry average, implying a discounted valuation for Super Micro Computer's stock.
- Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 1.96 suggests overvaluation in the eyes of investors, considering sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Super Micro Computer's EV/EBITDA ratio of 18.53 exceeds industry averages, indicating a premium valuation in the market
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Unmasking the Significance of Insider Transactions It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.
When discussing 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 stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
A new purchase by a company insider is a indication that they anticipate the stock will rise.
On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
Cracking Transaction Codes For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes 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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