Insider Move: Kerry McLean Exercises Options, Realizing $1.65M At Intuit

Kerry McLean, EVP at Intuit INTU, reported a large exercise of company stock options on February 28, according to a new SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday revealed that McLean, EVP at Intuit in the Information Technology sector, exercised stock options for 3,692 shares of INTU stock. The exercise price of the options was $216.64 per share.

During Wednesday's morning session, Intuit shares down by 1.04%, currently priced at $662.42. Considering the current price, McLean's 3,692 shares have a total value of $1,645,819.

Get to Know Intuit Better

Intuit is a provider of small-business accounting software (QuickBooks), personal tax solutions (TurboTax), and professional tax offerings (Lacerte). Founded in the mid-1980s, Intuit controls the majority of U.S. market share for small-business accounting and DIY tax-filing software.

Intuit: A Financial Overview

Revenue Growth: Intuit displayed positive results in 3 months. As of 31 January, 2024, the company achieved a solid revenue growth rate of approximately 11.34%. This indicates a notable increase in the company's top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Evaluating Earnings Performance:

• Gross Margin: With a low gross margin of 74.75%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): Intuit's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 1.26.

Debt Management: With a below-average debt-to-equity ratio of 0.38, Intuit adopts a prudent financial strategy, indicating a balanced approach to debt management.

Valuation Overview:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 68.37 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 12.57 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 44.01 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization Analysis: The company's market capitalization surpasses industry averages, showcasing a dominant size relative to peers and suggesting a strong market position.

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Navigating the Impact of Insider Transactions on Investments

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

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.

A Deep Dive into Insider 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 Intuit's Insider Trades.

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