Manesh Dadlani Executes Sell Order: Offloads $105K In Tapestry Stock

It was reported on May 29, that Manesh Dadlani, VP at Tapestry TPR executed a significant insider sell, according to an SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday outlined that Dadlani executed a sale of 2,500 shares of Tapestry with a total value of $105,574.

As of Thursday morning, Tapestry shares are up by 0.53%, currently priced at $41.74.

Get to Know Tapestry Better

Coach, Kate Spade, and Stuart Weitzman are Tapestry's fashion and accessory brands. The firm's products are sold through about 1,400 company-operated stores, wholesale channels, and e-commerce in North America (66% of fiscal 2023 sales), Europe, Asia (29% of fiscal 2023 sales), and elsewhere. Coach (75% of fiscal 2023 sales) is best known for affordable luxury leather products. Kate Spade (21% of fiscal 2023 sales) is known for colorful patterns and graphics. Women's handbags and accessories produced 69% of Tapestry's sales in fiscal 2023. Stuart Weitzman (4% of sales) generates nearly all its revenue from women's footwear. In August 2023, Tapestry agreed to acquire rival Capri and its three brands, Michael Kors, Versace, and Jimmy Choo.

Tapestry: Delving into Financials

Negative Revenue Trend: Examining Tapestry's financials over 3 months reveals challenges. As of 31 March, 2024, the company experienced a decline of approximately -1.8% in revenue growth, reflecting a decrease in top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Profitability Metrics: Unlocking Value

• Gross Margin: Achieving a high gross margin of 74.7%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Tapestry's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.61.

Debt Management: With a high debt-to-equity ratio of 3.34, Tapestry faces challenges in effectively managing its debt levels, indicating potential financial strain.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 11.01 is lower than the industry average, implying a discounted valuation for Tapestry's stock.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.45, Tapestry's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 8.4, Tapestry presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.

Market Capitalization Analysis: The company's market capitalization surpasses industry averages, showcasing a dominant size relative to peers and suggesting a strong market position.

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Delving Into the Significance of Insider Transactions

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.

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.

Transaction Codes Worth Your Attention

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously 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 Tapestry's Insider Trades.

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