Mark Haley Implements A Sell Strategy: Offloads $174K In Designer Brands Stock

It was reported on March 28, that Mark Haley, SVP at Designer Brands DBI executed a significant insider sell, according to an SEC filing.

What Happened: Haley opted to sell 16,125 shares of Designer Brands, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The transaction's total worth stands at $174,827.

As of Friday morning, Designer Brands shares are up by 2.92%, currently priced at $10.93.

About Designer Brands

Designer Brands Inc is a designer, producer, and retailer of footwear and accessories. The company operates in three reportable segments: the U.S. Retail segment, the Canada Retail segment, and the Brand Portfolio segment. The U.S. Retail segment operates the DSW Designer Shoe Warehouse banner through its direct-to-consumer U.S. stores and e-commerce site. The Canada Retail segment operates The Shoe Company and DSW banners through its direct-to-consumer Canada stores and e-commerce sites. The Brand Portfolio segment earns revenue from the sale of wholesale products to retailers, commissions for serving retailers as the design and buying agent for products under private labels, and the sale of branded products through its direct-to-consumer e-commerce sites.

Designer Brands: A Financial Overview

Negative Revenue Trend: Examining Designer Brands's financials over 3 months reveals challenges. As of 31 January, 2024, the company experienced a decline of approximately -0.81% in revenue growth, reflecting a decrease in top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Consumer Discretionary sector.

Insights into Profitability:

• Gross Margin: The company faces challenges with a low gross margin of 27.49%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Designer Brands's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of -0.46.

Debt Management: Designer Brands's debt-to-equity ratio is notably higher than the industry average. With a ratio of 3.45, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 23.09 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.22 is lower than the industry average, implying a discounted valuation for Designer Brands's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio of 12.98 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

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Unmasking the Significance of Insider Transactions

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

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.

Exploring Key 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 Designer Brands's Insider Trades.

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