Allegion President and CEO Makes $674K Stock Purchase

It was revealed in a recent SEC filing that John Stone, President and CEO at Allegion ALLE made a noteworthy insider purchase on July 30,.

What Happened: In a Form 4 filing on Tuesday with the U.S. Securities and Exchange Commission, it was disclosed that Stone bought 5,000 shares of Allegion, amounting to a total of $674,925.

The latest update on Wednesday morning shows Allegion shares up by 1.36%, trading at $141.23.

Discovering Allegion: A Closer Look

Allegion is a global security products company with a portfolio of leading brands such as Schlage, Von Duprin, and LCN. The Ireland-domiciled company was created via a spinoff transaction from Ingersoll-Rand in December 2013. In fiscal 2023, Allegion generated 75% of sales in the United States. The company primarily competes with Sweden-based Assa Abloy and Switzerland-based Dormakaba.

Breaking Down Allegion's Financial Performance

Positive Revenue Trend: Examining Allegion's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 5.82% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Industrials sector.

Navigating Financial Profits:

• Gross Margin: The company excels with a remarkable gross margin of 44.36%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Allegion's EPS is below the industry average. The company faced challenges with a current EPS of 1.78. This suggests a potential decline in earnings.

Debt Management: Allegion's debt-to-equity ratio is notably higher than the industry average. With a ratio of 1.69, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 22.15, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The current P/S ratio of 3.34 is above industry norms, reflecting an elevated valuation for Allegion's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio of 16.08, the company's market valuation exceeds industry averages.

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

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Navigating the Impact of Insider Transactions on Investments

In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.

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

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.

Check Out The Full List Of Allegion's Insider Trades.

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