John A Forbes Takes Money Off The Table, Sells $806K In Patrick Industries Stock

Revealing a significant insider sell on March 5, John A Forbes, Board Member at Patrick Industries PATK, as per the latest SEC filing.

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, Forbes sold 6,793 shares of Patrick Industries. The total transaction value is $806,804.

Tracking the Tuesday's morning session, Patrick Industries shares are trading at $120.91, showing a down of 0.0%.

About Patrick Industries

Patrick Industries Inc makes and sells building products and materials for recreational vehicles and manufactured housing. The company is organized into two segments based on product type: manufacturing and distribution. The manufacturing segment, which generates the majority of revenue, sells laminated and vinyl products that include furniture, shelving, cabinets, bath fixtures, and countertops. The distribution segment sells prefinished wall and ceiling panels, as well as electrical and plumbing products for the RV and manufactured housing industries. One of the firm's RV customers makes up a portion of revenue.

Breaking Down Patrick Industries's Financial Performance

Revenue Growth: Patrick Industries's revenue growth over a period of 3 months has faced challenges. As of 31 December, 2023, the company experienced a revenue decline of approximately -9.8%. This indicates a decrease in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Consumer Discretionary sector.

Key Profitability Indicators:

• Gross Margin: The company sets a benchmark with a high gross margin of 22.9%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Patrick Industries's EPS is below the industry average. The company faced challenges with a current EPS of 1.44. This suggests a potential decline in earnings.

Debt Management: Patrick Industries's debt-to-equity ratio surpasses industry norms, standing at 1.15. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 18.62, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.77 is lower than the industry average, implying a discounted valuation for Patrick Industries's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 9.57, Patrick Industries presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

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Illuminating the Importance of Insider Transactions

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

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

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

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

A Deep Dive into Insider Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously 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 Patrick Industries's Insider Trades.

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