Insider Move: Michael B Luu Invests $73K In California Water Servs Gr Stock

A notable insider purchase on March 8, was reported by Michael B Luu, VP at California Water Servs Gr CWT, based on the most recent SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Friday showed that Luu purchased 1,616 shares of California Water Servs Gr. The total transaction amounted to $73,317.

During Friday's morning session, California Water Servs Gr shares down by 0.0%, currently priced at $46.24.

Unveiling the Story Behind California Water Servs Gr

California Water Service Group is a U.S. water and utilities holding company based in California. The company engages in the production, treatment, storage, distribution, and sale of water for various uses. The firm operates through its subsidiaries, which can be divided between regulated and unregulated businesses. The regulated public utilities subsidiaries operate in California, New Mexico, Washington, and Hawaii. The unregulated subsidiaries provide water utility services to private companies and municipalities. The company derives the majority of its revenue from its operations in California and, overall, from residential customers.

California Water Servs Gr: Delving into Financials

Revenue Growth: California Water Servs Gr's remarkable performance in 3 months is evident. As of 31 December, 2023, the company achieved an impressive revenue growth rate of 6.76%. This signifies a substantial increase in the company's 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 Utilities sector.

Insights into Profitability:

• Gross Margin: The company faces challenges with a low gross margin of -23.85%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): California Water Servs Gr's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 0.53.

Debt Management: California Water Servs Gr's debt-to-equity ratio is below the industry average at 0.87, reflecting a lower dependency on debt financing and a more conservative financial approach.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 50.81, California Water Servs Gr's stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 3.32, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an impressive EV/EBITDA ratio of 17.67, California Water Servs Gr demonstrates exemplary market valuation, surpassing industry averages.

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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Exploring the Significance of Insider Trading

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per 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.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Exploring Key Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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 California Water Servs Gr's Insider Trades.

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