Lawrence Stephen Cootey Implements A Sell Strategy: Offloads $434K In Red Rock Resorts Stock

Making a noteworthy insider sell on February 27, Lawrence Stephen Cootey, EVP & Chief Financial Officer at Red Rock Resorts RRR, is reported in the latest SEC filing.

What Happened: Cootey's decision to sell 7,520 shares of Red Rock Resorts was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total value of the sale is $434,234.

Red Rock Resorts shares are trading down 0.0% at $55.99 at the time of this writing on Wednesday morning.

About Red Rock Resorts

Red Rock Resorts Inc along with its subsidiary is a gaming, development, and management company. The company mainly develops strategically located casino and entertainment properties. It generates a majority of its revenue from Casino.

Financial Milestones: Red Rock Resorts's Journey

Positive Revenue Trend: Examining Red Rock Resorts's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 8.75% as of 31 December, 2023, showcasing a substantial increase 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 Consumer Discretionary sector.

Exploring Profitability:

• Gross Margin: Achieving a high gross margin of 63.11%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Red Rock Resorts's EPS reflects a decline, falling below the industry average with a current EPS of 0.97.

Debt Management: Red Rock Resorts's debt-to-equity ratio is notably higher than the industry average. With a ratio of 19.75, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Insights into Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 19.03 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 3.35, Red Rock Resorts'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): Boasting an EV/EBITDA ratio of 9.38, Red Rock Resorts demonstrates a robust market valuation, outperforming industry benchmarks.

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

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The Relevance of Insider Transactions

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.

Deciphering Transaction Codes in Insider Filings

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Red Rock Resorts's Insider Trades.

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