Bullish Move: Charles R Patton Shows Confidence, Acquires $123K In California Water Servs Gr Stock

Charles R Patton, Board Member at California Water Servs Gr CWT, reported an insider buy on June 7, according to a new SEC filing.

What Happened: Patton's recent purchase of 2,488 shares of California Water Servs Gr, disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Friday, reflects confidence in the company's potential. The total transaction value is $123,454.

The latest market snapshot at Friday morning reveals California Water Servs Gr shares down by 1.43%, trading at $48.52.

Delving into California Water Servs Gr's Background

California Water Service Group is a U.S. water and utilities holding company based in California. The company engages in the production, treatment, storage, distribution, and sale of water for various uses. The firm operates through its subsidiaries, which can be divided between regulated and unregulated businesses. The regulated public utilities subsidiaries operate in California, New Mexico, Washington, and Hawaii. The unregulated subsidiaries provide water utility services to private companies and municipalities. The company derives the majority of its revenue from its operations in California and, overall, from residential customers.

California Water Servs Gr: Financial Performance Dissected

Revenue Growth: California Water Servs Gr displayed positive results in 3 months. As of 31 March, 2024, the company achieved a solid revenue growth rate of approximately 106.52%. 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 Utilities sector.

Key Profitability Indicators:

• Gross Margin: The company sets a benchmark with a high gross margin of 64.59%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): California Water Servs Gr's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 1.21.

Debt Management: California Water Servs Gr's debt-to-equity ratio is below the industry average at 0.91, reflecting a lower dependency on debt financing and a more conservative financial approach.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 19.53 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The P/S ratio of 3.03 is lower than the industry average, implying a discounted valuation for California Water Servs Gr's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 13.1, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

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Why Insider Transactions Are Key in Investment Decisions

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.

Considering the legal perspective, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, according to 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.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

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

Transaction Codes To Focus On

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 California Water Servs Gr's Insider Trades.

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