Insider Selling: Rebeca Obregon-Jimenez Unloads $278K Of FormFactor Stock

Disclosed on May 29, Rebeca Obregon-Jimenez, Director at FormFactor FORM, executed a substantial insider sell as per the latest SEC filing.

What Happened: Obregon-Jimenez's recent move involves selling 4,833 shares of FormFactor. This information is documented in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value is $278,328.

The latest update on Thursday morning shows FormFactor shares up by 0.14%, trading at $56.6.

All You Need to Know About FormFactor

FormFactor Inc designs, develops, manufactures, sells, and supports semiconductor probe card products. The company operates in two reportable segments namely Probe Cards Segment and the Systems Segment. Sales of probe cards and analytical probes are included in the Probe Cards Segment, while sales of probe stations and thermal sub-systems are included in the Systems Segment. Probe cards generate the maximum revenue from its operations. It offers multiple product lines which include analytical probes, probe stations, thermal sub-systems, and related services.

FormFactor's Financial Performance

Revenue Growth: FormFactor displayed positive results in 3 months. As of 31 March, 2024, the company achieved a solid revenue growth rate of approximately 0.76%. This indicates a notable increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Information Technology sector.

Profitability Metrics:

• Gross Margin: The company shows a low gross margin of 37.18%, suggesting potential challenges in cost control and profitability compared to its peers.

• Earnings per Share (EPS): FormFactor's EPS is below the industry average. The company faced challenges with a current EPS of 0.28. This suggests a potential decline in earnings.

Debt Management: FormFactor's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.05.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: FormFactor's P/E ratio of 43.15 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 6.68, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): FormFactor's EV/EBITDA ratio, lower than industry averages at 32.29, indicates attractively priced shares.

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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Navigating the Impact of Insider Transactions on Investments

Insider transactions, although significant, should be considered within the larger context of market analysis and trends.

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.

Cracking Transaction Codes

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely 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 FormFactor's Insider Trades.

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