Vice President Of Federated Hermes Sold $2.61M In Stock

JOHN FISHER, Vice President at Federated Hermes FHI, executed a substantial insider sell on August 5, according to an SEC filing.

What Happened: FISHER opted to sell 79,830 shares of Federated Hermes, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The transaction's total worth stands at $2,611,446.

The latest update on Tuesday morning shows Federated Hermes shares down by 0.0%, trading at $32.49.

Unveiling the Story Behind Federated Hermes

Federated provides asset management services for institutional and individual investors. The firm had $778.7 billion in managed assets at the end of March 2024, composed of equity (10%), multi-asset (less than 1%), fixed-income (12%), alternative (3%), and money market (74%) funds. That said, the firm's cash-management operations are expected to generate around 47% of Federated's revenue this year, compared with 29%, 13%, and 11%, respectively, for the firm's equity, fixed-income, and alternatives/multi-asset operations. From a channel perspective, the company's products are distributed via trust banks, wealth managers and retail broker/dealers (64% of AUM), institutional investors (28%), and international clients (8%).

Federated Hermes's Financial Performance

Negative Revenue Trend: Examining Federated Hermes's financials over 3 months reveals challenges. As of 30 June, 2024, the company experienced a decline of approximately -7.07% 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 Financials sector.

Exploring Profitability:

• Gross Margin: The company excels with a remarkable gross margin of 67.52%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Federated Hermes's EPS reflects a decline, falling below the industry average with a current EPS of 0.2.

Debt Management: Federated Hermes's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.44.

Market Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 11.09, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 1.66, 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): Federated Hermes's EV/EBITDA ratio at 6.69 suggests potential undervaluation, falling below industry averages.

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

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Illuminating the Importance of Insider Transactions

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

In the context of 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 outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed 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.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

Transaction Codes To Focus On

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes 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 Federated Hermes's Insider Trades.

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