Benzinga - by Benzinga Insights, Benzinga Staff Writer.
A substantial insider move unfolded on March 18, as Jabbar, Senior Vice President at Kroger (NYSE:KR), reported the acquisition of stock options for 19,849 shares in an SEC filing.
What Happened: In a Form 4 filing with the U.S. Securities and Exchange Commission on Monday, Jabbar, Senior Vice President at Kroger, acquired stock options for 19,849 shares of KR. These options provide Jabbar with the right to purchase the company's stock at $55.51 per share.
The Monday morning update indicates Kroger shares down by 0.57%, currently priced at $55.74. At this value, Jabbar's 19,849 shares are worth $4,565.
Delving into Kroger's Background Kroger is the leading U.S. grocer, with 2,719 supermarkets operating under several banners throughout the country at the end of fiscal 2022. Around 83% of stores have pharmacies, while nearly 60% also sell fuel. The company also operates roughly 120 fine jewelry stores. Kroger features a leading private-label offering and manufactures around 30% of its own-brand units (and more than 40% of its grocery own-label assortment) itself in 33 food production plants nationwide. Kroger is a top-two grocer in most of its major markets (as of early 2021, according to company data). Virtually all of Kroger's sales come from the United States. Kroger has offered to acquire Albertsons in a $25 billion deal; if the transaction is approved by regulators, it should close in 2024.
Unraveling the Financial Story of Kroger Revenue Growth: Kroger's remarkable performance in 3 months is evident. As of 31 January, 2024, the company achieved an impressive revenue growth rate of 9.15%. This signifies a substantial increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Consumer Staples sector.
Insights into Profitability:
- Gross Margin: The company shows a low gross margin of 22.72%, suggesting potential challenges 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 1.01, Kroger showcases strong earnings per share.
Understanding Financial Valuation:
- Price to Earnings (P/E) Ratio: A higher-than-average P/E ratio of 18.94 suggests caution, as the stock may be overvalued in the eyes of investors.
- Price to Sales (P/S) Ratio: The current P/S ratio of 0.27 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 8.04 is below the industry average, indicating that it may be relatively undervalued compared to peers.
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Navigating the Impact of Insider Transactions on Investments Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.
In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.
Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.
A Closer Look at 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 Kroger's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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