Insider Selling: McWILLIAMS ALAN REID Unloads $394K Of Sanmina Stock

McWILLIAMS ALAN REID, EVP at Sanmina SANM, disclosed an insider sell on May 16, according to a recent SEC filing.

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday, REID sold 6,000 shares of Sanmina. The total transaction value is $394,903.

As of Friday morning, Sanmina shares are down by 0.0%, currently priced at $65.76.

Discovering Sanmina: A Closer Look

Sanmina Corp is a provider of integrated manufacturing solutions, components, and after-market services to original equipment manufacturers in the communications networks, storage, industrial, defense and aerospace end markets. The company operates in two business segments: Integrated Manufacturing Solutions, which consists of printed circuit board assembly and represents a majority of the firm's revenue; and Components, Products, and Services, which includes interconnect systems and mechanical systems. The firm generates revenue primarily in the United States, China, and Mexico, but has a presence around the world.

Sanmina: A Financial Overview

Negative Revenue Trend: Examining Sanmina's financials over 3 months reveals challenges. As of 31 March, 2024, the company experienced a decline of approximately -20.93% in revenue growth, reflecting a decrease in top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Analyzing Profitability Metrics:

• Gross Margin: The company faces challenges with a low gross margin of 8.44%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Sanmina's EPS is below the industry average. The company faced challenges with a current EPS of 0.94. This suggests a potential decline in earnings.

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

Navigating Market Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 15.58 is lower than the industry average, implying a discounted valuation for Sanmina's stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 0.48 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): With a below-average EV/EBITDA ratio of 6.66, Sanmina presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.

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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The Impact of Insider Transactions on Investments

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

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.

Deciphering Transaction Codes in Insider Filings

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.

Check Out The Full List Of Sanmina's Insider Trades.

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