Kimberly-Clark Insider Trades Send A Signal

A substantial insider sell was reported on May 1, by Doug Cunningham, President at Kimberly-Clark KMB, based on the recent SEC filing.

What Happened: Cunningham's decision to sell 1,040 shares of Kimberly-Clark was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the sale is $142,334.

In the Thursday's morning session, Kimberly-Clark's shares are currently trading at $136.25, experiencing a down of 0.16%.

Get to Know Kimberly-Clark Better

With more than half of sales from personal care and another third from consumer tissue products, Kimberly-Clark sits as a leading manufacturer in the tissue and hygiene realm. Its brand mix includes Huggies, Pull-Ups, Kotex, Depend, Kleenex, and Cottonelle. The firm also operates K-C Professional, which partners with businesses to provide safety and sanitary offerings for the workplace. Kimberly-Clark generates just over of half its sales in North America and more than 10% in Europe, with the rest primarily concentrated in Asia and Latin America.

Kimberly-Clark: Delving into Financials

Revenue Growth: Kimberly-Clark's revenue growth over a period of 3 months has faced challenges. As of 31 March, 2024, the company experienced a revenue decline of approximately -0.89%. This indicates a decrease in the company's 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 Staples sector.

Insights into Profitability:

• Gross Margin: With a low gross margin of 37.11%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency 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 1.92, Kimberly-Clark showcases strong earnings per share.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 7.63.

Exploring Valuation Metrics Landscape:

• Price to Earnings (P/E) Ratio: Kimberly-Clark's P/E ratio of 25.04 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: With a P/S ratio of 2.27 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Kimberly-Clark's EV/EBITDA ratio at 16.93 suggests potential undervaluation, falling below industry averages.

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

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Exploring the Significance of Insider Trading

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.

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.

Unlocking the Meaning of 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 Kimberly-Clark's Insider Trades.

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