Insider Decision: Frank J. Fertitta III Offloads $40.31M Worth Of Red Rock Resorts Stock

Frank J. Fertitta III, Chief Executive Officer at Red Rock Resorts RRR, disclosed an insider sell on May 16, according to a recent SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Thursday outlined that III executed a sale of 800,000 shares of Red Rock Resorts with a total value of $40,312,000.

Monitoring the market, Red Rock Resorts's shares up by 0.52% at $52.3 during Thursday's morning.

About Red Rock Resorts

Red Rock Resorts Inc along with its subsidiary is a gaming, development, and management company. The company mainly develops strategically located casino and entertainment properties. It generates a majority of its revenue from Casino.

Breaking Down Red Rock Resorts's Financial Performance

Revenue Growth: Over the 3 months period, Red Rock Resorts showcased positive performance, achieving a revenue growth rate of 12.74% as of 31 March, 2024. This reflects a substantial increase in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company excelled with a growth rate higher than the average among peers.

Evaluating Earnings Performance:

• Gross Margin: With a high gross margin of 62.86%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): Red Rock Resorts's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 0.73.

Debt Management: Red Rock Resorts's debt-to-equity ratio stands notably higher than the industry average, reaching 25.53. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Financial Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 18.13 is lower than the industry average, implying a discounted valuation for Red Rock Resorts's stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 3.02 is above industry norms, reflecting an elevated valuation for Red Rock Resorts's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 9.03 reflects market recognition of Red Rock Resorts's value, positioning it as more highly valued compared to industry peers.

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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The Relevance of Insider Transactions

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

In the context of legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

Cracking 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 Red Rock Resorts's Insider Trades.

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