Cirrus Logic Recent Insider Activity

On May 13, a recent SEC filing unveiled that Justin E Dougherty, SVP at Cirrus Logic CRUS made an insider sell.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Monday outlined that Dougherty executed a sale of 4,000 shares of Cirrus Logic with a total value of $431,400.

The latest update on Tuesday morning shows Cirrus Logic shares up by 3.19%, trading at $111.22.

Discovering Cirrus Logic: A Closer Look

Cirrus Logic Inc is a provider of integrated circuits for audio and voice signal processing applications. The firm's products are organized into two streams: portable audio products, and non-portable audio and other products. These products include analog and mixed-signal components targeting mobile devices, smart homes, and applications in the automotive, energy, and industrial markets. Roughly half of the firm's revenue is generated in China, with the rest coming from the United States, Europe, South Korea, and countries across the world.

A Deep Dive into Cirrus Logic's Financials

Decline in Revenue: Over the 3 months period, Cirrus Logic faced challenges, resulting in a decline of approximately -39.93% 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.

Interpreting Earnings Metrics:

• Gross Margin: The company maintains a high gross margin of 51.8%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Cirrus Logic's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.83.

Debt Management: Cirrus Logic's debt-to-equity ratio is below the industry average at 0.09, reflecting a lower dependency on debt financing and a more conservative financial approach.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The P/E ratio of 22.0 is lower than the industry average, implying a discounted valuation for Cirrus Logic's stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 3.38 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): The company's EV/EBITDA ratio of 15.22 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

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Unmasking the Significance of Insider Transactions

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

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

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Essential Transaction Codes Unveiled

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 Cirrus Logic's Insider Trades.

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