Insider Transaction: Michael P Hartung Sells $327K Worth Of Flex Shares

Michael P Hartung, Group President at Flex FLEX, disclosed an insider sell on June 13, according to a recent SEC filing.

What Happened: Hartung's recent Form 4 filing with the U.S. Securities and Exchange Commission on Thursday unveiled the sale of 10,183 shares of Flex. The total transaction value is $327,892.

At Thursday morning, Flex shares are down by 1.09%, trading at $31.62.

Unveiling the Story Behind Flex

Flex Ltd is a contract manufacturing company providing comprehensive electronics design, manufacturing, and product management services to electronics and technology companies. The company's operating segments include Flex Agility Solutions (FAS) and Flex Reliability Solutions (FRS). Flex Agility Solutions segment includes markets such as Communications, Enterprise and Cloud; Lifestyle; and Consumer Devices. Flex Reliability Solutions segment includes markets such as Automotive, Health Solutions, and Industrial.

Flex: A Financial Overview

Negative Revenue Trend: Examining Flex's financials over 3 months reveals challenges. As of 31 March, 2024, the company experienced a decline of approximately -20.02% in revenue growth, reflecting a decrease in top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Information Technology sector.

Interpreting Earnings Metrics:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of -0.64%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Flex's EPS is below the industry average. The company faced challenges with a current EPS of 0.967896. This suggests a potential decline in earnings.

Debt Management: Flex's debt-to-equity ratio stands notably higher than the industry average, reaching 0.7. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: Flex's P/E ratio of 16.15 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The current P/S ratio of 0.53 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): Flex's EV/EBITDA ratio, lower than industry averages at 10.02, indicates attractively priced shares.

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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Why Pay Attention to Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Understanding Crucial Transaction Codes

Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as 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 Flex's Insider Trades.

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