Cactus President Trades Company's Stock

Revealing a significant insider sell on May 9, Joel Bender, President at Cactus WHD, as per the latest SEC filing.

What Happened: Bender's recent Form 4 filing with the U.S. Securities and Exchange Commission on Thursday unveiled the sale of 600,000 shares of Cactus. The total transaction value is $30,843,161.

The latest update on Friday morning shows Cactus shares up by 1.25%, trading at $51.75.

Unveiling the Story Behind Cactus

Cactus Inc is engaged in the designing, manufacturing, and sale of wellheads and pressure control equipment. Its principal products include Cactus SafeDrill wellhead systems, conventional wellheads, and production valves among others. The company also provides mission-critical field services, including service crews to assist with the installation, maintenance, and safe handling of the wellhead and pressure control equipment, as well as repair services for equipment that it sells or rents. It sells or rents its products principally for onshore unconventional oil and gas wells that are utilized during the drilling, completion (including fracturing), and production. The company has two operating segments; Pressure Control , which generates key revenue and Spoolable Technologies.

Cactus: Delving into Financials

Revenue Growth: Cactus's remarkable performance in 3 months is evident. As of 31 March, 2024, the company achieved an impressive revenue growth rate of 20.02%. This signifies a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Energy sector.

Key Profitability Indicators:

• Gross Margin: The company sets a benchmark with a high gross margin of 38.4%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Cactus's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 0.6.

Debt Management: Cactus's debt-to-equity ratio is below the industry average. With a ratio of 0.05, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Market Valuation:

• Price to Earnings (P/E) Ratio: Cactus's P/E ratio of 20.2 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 3.56 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Cactus's EV/EBITDA ratio at 8.89 suggests potential undervaluation, falling below industry averages.

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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Illuminating the Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

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.

Unlocking the Meaning of Transaction Codes

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes 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 Cactus's Insider Trades.

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