Insider Confidence On Display: Lorenzo J Fertitta Acquires $40.31M In Red Rock Resorts Stock

On May 16, a substantial insider purchase was made by Lorenzo J Fertitta, Vice President at Red Rock Resorts RRR, as per the latest SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Fertitta purchased 800,000 shares of Red Rock Resorts. The total transaction amounted to $40,312,000.

The latest market snapshot at Thursday morning reveals Red Rock Resorts shares up by 0.52%, trading at $52.3.

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.

Unraveling the Financial Story of Red Rock Resorts

Revenue Growth: Red Rock Resorts's revenue growth over a period of 3 months has been noteworthy. As of 31 March, 2024, the company achieved a revenue growth rate of approximately 12.74%. This indicates 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 Consumer Discretionary sector.

Holistic Profitability Examination:

• Gross Margin: The company sets a benchmark with a high gross margin of 62.86%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Red Rock Resorts's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 0.73.

Debt Management: With a high debt-to-equity ratio of 25.53, Red Rock Resorts faces challenges in effectively managing its debt levels, indicating potential financial strain.

Valuation Overview:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 18.13 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 3.02 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Red Rock Resorts's EV/EBITDA ratio, surpassing industry averages at 9.03, positions it with an above-average valuation in the market.

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

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Understanding the Significance of Insider Transactions

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

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.

A Closer Look at Important Transaction Codes

When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates 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.