Insider Transaction: Douglas Taylor Sells $535K Worth Of Cleveland-Cliffs Shares

Douglas Taylor, Director at Cleveland-Cliffs CLF, disclosed an insider sell on June 13, according to a recent SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Taylor sold 36,000 shares of Cleveland-Cliffs. The total transaction amounted to $535,222.

Cleveland-Cliffs's shares are actively trading at $14.6, experiencing a down of 1.78% during Friday's morning session.

Delving into Cleveland-Cliffs's Background

Cleveland-Cliffs Inc is a flat-rolled steel producer and manufacturer of iron ore pellets in North America. It is organized into four operating segments based on differentiated products, Steelmaking, Tubular, Tooling and Stamping and European Operations, but operates through one reportable segment -Steelmaking. It is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling and tubing. It serves a diverse range of other markets due to its comprehensive offering of flat-rolled steel products. Geographically, it operates in the United States, Canada and other countries. The majority of revenue is from the United States. It is a supplier of steel to the automotive industry in North America.

Cleveland-Cliffs's Financial Performance

Decline in Revenue: Over the 3 months period, Cleveland-Cliffs faced challenges, resulting in a decline of approximately -1.81% in revenue growth as of 31 March, 2024. This signifies a reduction in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Materials sector.

Exploring Profitability:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 5.48%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Cleveland-Cliffs's EPS reflects a decline, falling below the industry average with a current EPS of -0.14.

Debt Management: Cleveland-Cliffs's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.51.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: Cleveland-Cliffs's P/E ratio of 19.81 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.34, 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): With an EV/EBITDA ratio lower than industry benchmarks at 5.85, Cleveland-Cliffs presents an attractive value opportunity.

Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Uncovering the Importance of Insider Activity

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

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.

Deciphering Transaction Codes in Insider Filings

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 Cleveland-Cliffs's Insider Trades.

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