Smart Money Move: Andrew Kenner Grabs $111K Worth Of Westlake Chemical Stock

A significant insider buy by Andrew Kenner, SVP at Westlake Chemical WLKP, was executed on April 1, and reported in the recent SEC filing.

What Happened: Kenner's recent move, as outlined in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday, involves purchasing 5,000 shares of Westlake Chemical. The total transaction value is $111,150.

The latest market snapshot at Monday morning reveals Westlake Chemical shares up by 1.35%, trading at $22.5.

Unveiling the Story Behind Westlake Chemical

Westlake Chemical Partners LP is a part of the chemical industry in the United States. Its operations are conducted through OpCo, it acquires and develop ethyelene production facilities, which convert ethane into ethylene. OpCo sells ethylene and its co-products such as propylene, crude butadiene, pyrolysis gasoline, and hydrogen to Westlake and other customers located in the United States. Its assets include three ethylene production facilities in Calvert City, Kentucky, and Lake Charles, Louisiana.

Unraveling the Financial Story of Westlake Chemical

Decline in Revenue: Over the 3 months period, Westlake Chemical faced challenges, resulting in a decline of approximately -18.96% in revenue growth as of 31 December, 2023. This signifies a reduction 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 Materials sector.

Navigating Financial Profits:

• Gross Margin: The company excels with a remarkable gross margin of 33.87%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 0.41, Westlake Chemical showcases strong earnings per share.

Debt Management: Westlake Chemical's debt-to-equity ratio stands notably higher than the industry average, reaching 1.43. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 14.42 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.66 is lower than the industry average, implying a discounted valuation for Westlake Chemical'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 2.38 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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The Impact of Insider Transactions on Investments

Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.

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

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

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

Deciphering Transaction Codes in Insider Filings

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes 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 Westlake Chemical's Insider Trades.

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