Benzinga - by Benzinga Insights, Benzinga Staff Writer.
On June 20, STEEL PARTNERS HOLDINGS LP, Board Member at Steel Connect (NASDAQ:STCN) executed a significant insider buy, as disclosed in the latest SEC filing.
What Happened: In a significant move reported in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday, LP purchased 21,342 shares of Steel Connect, demonstrating confidence in the company's growth potential. The total value of the transaction stands at $245,892.
During Friday's morning session, Steel Connect shares up by 0.24%, currently priced at $12.52.
Delving into Steel Connect's Background Steel Connect Inc is a diversified holding company. The company's operating segment include Direct Marketing and Supply Chain. It generates maximum revenue from the Direct Marketing segment. Geographically, it derives a majority of revenue from the United States and also has a presence in China; Netherlands, and others. The company serves clients in various industries including consumer electronics, communications, computing, software, storage, and retail industries.
Financial Insights: Steel Connect Negative Revenue Trend: Examining Steel Connect's financials over 3 months reveals challenges. As of 30 April, 2024, the company experienced a decline of approximately -4.96% in revenue growth, reflecting a decrease in 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 Industrials sector.
Profitability Metrics: Unlocking Value
- Gross Margin: The company faces challenges with a low gross margin of 29.68%, suggesting potential difficulties in cost control and 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 2.73, Steel Connect showcases strong earnings per share.
Exploring Valuation Metrics Landscape:
- Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 3.95, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
- Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 2.07, Steel Connect's stock is perceived as being overvalued in the market, particularly in relation to sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 2.88 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 Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.
In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.
When a company insider makes a new purchase, that is an indication that they expect the stock to rise.
Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.
Cracking Transaction Codes Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as 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 Steel Connect's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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