Valero Energy Recent Insider Activity

Fred M Diaz, Board Member at Valero Energy VLO, disclosed an insider sell on May 13, according to a recent SEC filing.

What Happened: Diaz's decision to sell 720 shares of Valero Energy was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The total value of the sale is $113,850.

During Tuesday's morning session, Valero Energy shares down by 1.11%, currently priced at $154.2.

Delving into Valero Energy's Background

Valero Energy is one of the largest independent refiners in the United States. It operates 15 refineries with a total throughput capacity of 3.2 million barrels a day in the United States, Canada, and the United Kingdom. Valero also owns 12 ethanol plants with capacity of 1.6 billion gallons a year and holds a 50% stake in Diamond Green Diesel, which has capacity to produce 1.2 billion gallons per year of renewable diesel.

Unraveling the Financial Story of Valero Energy

Revenue Challenges: Valero Energy's revenue growth over 3 months faced difficulties. As of 31 March, 2024, the company experienced a decline of approximately -12.84%. This indicates 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 Energy sector.

Holistic Profitability Examination:

• Gross Margin: With a low gross margin of 6.21%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): Valero Energy's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 3.75.

Debt Management: Valero Energy's debt-to-equity ratio is below the industry average. With a ratio of 0.42, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Valuation Overview:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 7.65 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.38, 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): Indicated by a lower-than-industry-average EV/EBITDA ratio of 4.47, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

Market Capitalization Analysis: Above industry benchmarks, the company's market capitalization emphasizes a noteworthy size, indicative of a strong market presence.

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Understanding the Significance of Insider Transactions

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

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

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Transaction Codes To Focus On

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 Valero Energy's Insider Trades.

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