Insider Activity Update: Rebecca Thompson Executes Options Exercise, Resulting In $679K At AAON

A large exercise of company stock options by Rebecca Thompson, Chief Financial Officer at AAON AAON was disclosed in a new SEC filing on May 16, as part of an insider exercise.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Thompson, Chief Financial Officer at AAON, a company in the Industrials sector, just exercised stock options worth 13,500 shares of AAON stock with an exercise price of $24.63.

The Friday morning update indicates AAON shares up by 0.16%, currently priced at $74.98. At this value, Thompson's 13,500 shares are worth $679,725.

All You Need to Know About AAON

AAON Inc is a manufacturer of air-conditioning and heating equipment. The products include rooftop units, chillers, packaged outdoor mechanical rooms, air-handling units, makeup air units, energy-recovery units, condensing units, geothermal heat pumps, and self-contained units and coils. AAON's products serve the commercial and industrial new construction and replacement markets, primarily in North America.

Key Indicators: AAON's Financial Health

Decline in Revenue: Over the 3 months period, AAON faced challenges, resulting in a decline of approximately -1.45% in revenue growth as of 31 March, 2024. This signifies a reduction in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Key Profitability Indicators:

• Gross Margin: With a low gross margin of 35.19%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): AAON's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.48.

Debt Management: With a below-average debt-to-equity ratio of 0.02, AAON adopts a prudent financial strategy, indicating a balanced approach to debt management.

Navigating Market Valuation:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 34.82 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 5.37 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 21.96, the company's EV/EBITDA ratio outperforms industry norms, reflecting positive market perception. This positioning indicates optimistic expectations for the company's future performance.

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.

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

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Understanding Crucial Transaction Codes

When analyzing 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 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 AAON's Insider Trades.

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