Nordstrom Recent Insider Activity

Disclosed in the latest SEC filing, a significant insider purchase on June 4, involves Glenda McNeal, Director at Nordstrom JWN.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Tuesday showed that McNeal purchased 7,170 shares of Nordstrom. The total transaction amounted to $164,981.

At Wednesday morning, Nordstrom shares are down by 2.36%, trading at $21.77.

Discovering Nordstrom: A Closer Look

Nordstrom is a fashion retailer that operates about 93 department stores and more than 260 off-price Nordstrom Rack stores. The company also operates both full- and off-price e-commerce sites, two clearance stores, and seven Local locations. Nordstrom's largest merchandise categories are women's apparel (27% of 2023 sales), shoes (26% of 2023 sales), men's apparel (15% of 2023 sales), and beauty (13% of 2023 sales). Nordstrom, which traces its history to a shoe store opened in Seattle in 1901, continues to be partially owned and managed by members of the eponymous family.

Nordstrom's Economic Impact: An Analysis

Revenue Growth: Nordstrom's revenue growth over a period of 3 months has faced challenges. As of 30 April, 2024, the company experienced a revenue decline of approximately -24.55%. This indicates a decrease in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Discretionary sector.

Analyzing Profitability Metrics:

• Gross Margin: The company shows a low gross margin of 33.94%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Nordstrom's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of -0.24.

Debt Management: Nordstrom's debt-to-equity ratio stands notably higher than the industry average, reaching 5.07. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Market Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 12.05 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a P/S ratio of 0.25 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 5.72 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization: Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.

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Navigating the Impact of Insider Transactions on Investments

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

A Deep Dive into Insider Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously 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 indicates 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 Nordstrom's Insider Trades.

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