Major Decision: Brandon O'Brien Exercises Options, Realizing $672K At CorVel

A substantial insider activity was disclosed on February 22, as O'Brien, Chief Financial Officer at CorVel CRVL, reported the exercise of a large sell of company stock options.

What Happened: A notable Form 4 filing on Thursday with the U.S. Securities and Exchange Commission revealed that O'Brien, Chief Financial Officer at CorVel, exercised stock options for 4,013 shares of CRVL, resulting in a transaction value of $672,159.

The latest update on Friday morning shows CorVel shares down by 0.0%, trading at $251.02. At this price, O'Brien's 4,013 shares are worth $672,159.

Delving into CorVel's Background

CorVel Corp applies technology including artificial intelligence, machine learning and natural language processing to enhance the managing of episodes of care and the related health care costs. It partners with employers, third-party administrators, insurance companies and government agencies in managing worker's compensation and health, auto and liability services. The company's solutions combine integrated technologies with a human touch. CorVel's customized services, delivered locally, are backed by a national team to support clients as well as their customers and patients.

CorVel's Economic Impact: An Analysis

Revenue Growth: CorVel's remarkable performance in 3 months is evident. As of 31 December, 2023, the company achieved an impressive revenue growth rate of 12.78%. This signifies a substantial increase in the company's top-line earnings. When compared to others in the Health Care sector, the company excelled with a growth rate higher than the average among peers.

Insights into Profitability:

• Gross Margin: The company faces challenges with a low gross margin of 20.84%, 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 1.0, CorVel showcases strong earnings per share.

Debt Management: CorVel's debt-to-equity ratio is below the industry average. With a ratio of 0.14, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 58.27 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 5.64, CorVel'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): A high EV/EBITDA ratio of 34.89 reflects market recognition of CorVel's value, positioning it as more highly valued compared to industry peers.

Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

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Uncovering the Importance of Insider Activity

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Transaction Codes Worth Your Attention

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 CorVel's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.