Insider Unloading: Robert Singer Sells $2.02M Worth Of Coty Shares

Robert Singer, Board Member at Coty COTY, executed a substantial insider sell on March 6, according to an SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday outlined that Singer executed a sale of 159,982 shares of Coty with a total value of $2,017,148.

Coty shares are trading down 0.16% at $12.73 at the time of this writing on Thursday morning.

Unveiling the Story Behind Coty

Coty is a global beauty maker that focuses on fragrance (59% of sales) and color cosmetics (28%), with limited exposure to skincare (5%) and body care (8%). For its fragrance business, Coty licenses luxury and high-end brands including Gucci, Burberry, Hugo Boss, Davidoff, and Calvin Klein, while its consumer cosmetics business focuses on acquired mass brands such as CoverGirl, Max Factor, Rimmel, Sally Hansen, and Bourjois. It also collaborates with social media celebrities Kim Kardashian and Kylie Jenner to launch makeup products bearing their names. By region, Coty generates close to 45% of sales from Europe, 30% from North America, 10% from Asia, and 8% from Latin America, with the rest from travel retail. German investment firm JAB is a controlling shareholder, with a 53% stake.

Understanding the Numbers: Coty's Finances

Revenue Growth: Over the 3 months period, Coty showcased positive performance, achieving a revenue growth rate of 13.39% as of 31 December, 2023. This reflects a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Consumer Staples sector.

Evaluating Earnings Performance:

• Gross Margin: The company shows a low gross margin of 65.07%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Coty's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.2.

Debt Management: Coty's debt-to-equity ratio surpasses industry norms, standing at 0.91. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 36.43, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 1.88, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry benchmarks at 12.34, Coty presents an attractive value opportunity.

Market Capitalization: Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.

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Why Insider Transactions Are Key in Investment Decisions

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

The Insider's Guide to 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 Coty's Insider Trades.

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