Flex Insider Trades Send A Signal

Disclosed on June 14, Tan Kwang Hooi, Group President at Flex FLEX, executed a substantial insider sell as per the latest SEC filing.

What Happened: Hooi's recent Form 4 filing with the U.S. Securities and Exchange Commission on Friday unveiled the sale of 11,570 shares of Flex. The total transaction value is $371,766.

Tracking the Friday's morning session, Flex shares are trading at $31.36, showing a down of 2.06%.

All You Need to Know About 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.

A Deep Dive into Flex's Financials

Revenue Challenges: Flex's revenue growth over 3 months faced difficulties. As of 31 March, 2024, the company experienced a decline of approximately -20.02%. This indicates a decrease in 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 Information Technology sector.

Analyzing Profitability Metrics:

• Gross Margin: The company faces challenges with a low gross margin of -0.64%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Flex's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.967896.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 0.7, caution is advised due to increased financial risk.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: Flex's P/E ratio of 16.17 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.53 is lower than the industry average, implying a discounted valuation for Flex's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio of 10.03 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization: Boasting an elevated market capitalization, the company surpasses industry averages. This signals substantial size and strong market recognition.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

Why Insider Transactions Are Key in Investment Decisions

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

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.

Exploring Key Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes 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.