Brandy Ford Takes Money Off The Table, Sells $59K In ScanSource Stock

Brandy Ford, SVP & Chief Accounting Officer at ScanSource SCSC, reported an insider sell on May 13, according to a new SEC filing.

What Happened: After conducting a thorough analysis, Ford sold 1,253 shares of ScanSource. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The total transaction value is $59,216.

The latest market snapshot at Tuesday morning reveals ScanSource shares down by 1.73%, trading at $46.0.

About ScanSource

ScanSource Inc provides value-added services for technology manufacturers and sells to resellers in specialty technology markets. The firm's operations are organized in two segments: Specialty Technology Solutions and Modern Communications and Cloud. It generates maximum revenue from the Specialty Technology Solutions segment. The Specialty Technology Solutions segment includes the Company's business in mobility and barcode, POS, payments, security and networking technologies. Geographically, it derives a majority of revenue from the United States.

Key Indicators: ScanSource's Financial Health

Decline in Revenue: Over the 3 months period, ScanSource faced challenges, resulting in a decline of approximately -15.01% in revenue growth as of 31 March, 2024. This signifies a reduction 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 Information Technology sector.

Insights into Profitability:

• Gross Margin: The company shows a low gross margin of 12.55%, suggesting potential challenges in cost control and profitability compared to its peers.

• Earnings per Share (EPS): ScanSource's EPS reflects a decline, falling below the industry average with a current EPS of 0.51.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.15.

Exploring Valuation Metrics Landscape:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 15.15 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 0.34 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): ScanSource's EV/EBITDA ratio at 7.85 suggests potential undervaluation, falling below industry averages.

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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Delving Into the Significance of Insider Transactions

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Navigating the World of Insider 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 ScanSource's Insider Trades.

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