Insider Move: WILLIAM JOHNSON Invests $643K In United Parcel Service Stock

WILLIAM JOHNSON, Board Member at United Parcel Service UPS, disclosed an insider purchase on July 25, based on a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that JOHNSON purchased 5,000 shares of United Parcel Service. The total transaction amounted to $643,034.

At Friday morning, United Parcel Service shares are up by 1.5%, trading at $128.99.

Delving into United Parcel Service's Background

As the world's largest parcel delivery company, UPS manages a massive fleet of more than 500 planes and 100,000 vehicles, along with many hundreds of sorting facilities, to deliver an average of about 22 million packages per day to residences and businesses across the globe. UPS' domestic US package operations generate around 64% of total revenue while international package makes up 20%. Air and ocean freight forwarding, truckload brokerage, and contract logistics make up the remainder. UPS is currently pursuing "strategic alternatives" for its truck brokerage unit, Coyote, which it acquired in 2015.

United Parcel Service's Economic Impact: An Analysis

Revenue Growth: United Parcel Service's remarkable performance in 3 months is evident. As of 30 June, 2024, the company achieved an impressive revenue growth rate of 0.52%. This signifies a substantial increase in the company's top-line earnings. When compared to others in the Industrials sector, the company excelled with a growth rate higher than the average among peers.

Analyzing Profitability Metrics:

• Gross Margin: Achieving a high gross margin of 17.43%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 1.65, United Parcel Service showcases strong earnings per share.

Debt Management: With a high debt-to-equity ratio of 1.55, United Parcel Service faces challenges in effectively managing its debt levels, indicating potential financial strain.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 20.73, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.22 is above industry norms, reflecting an elevated valuation for United Parcel Service's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): United Parcel Service's EV/EBITDA ratio, lower than industry averages at 11.65, indicates attractively priced shares.

Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.

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Exploring the Significance of Insider Trading

Insider transactions serve as a piece of the puzzle in investment decisions, rather than the entire picture.

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

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Important Transaction Codes

When analyzing transactions, investors tend to focus on those in the open market, 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 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 United Parcel Service's Insider Trades.

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