Timken EVP & CFO Sold $819K In Company Stock

On August 15, a recent SEC filing unveiled that Philip D Fracassa, EVP & CFO at Timken TKR made an insider sell.

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday, Fracassa sold 10,000 shares of Timken. The total transaction value is $819,800.

At Friday morning, Timken shares are down by 0.0%, trading at $82.9.

Discovering Timken: A Closer Look

The Timken Company is a manufacturer of bearings, gear belts, industrial motion products and chain-related products. The company sells its portfolio of bearings, including tapered, spherical and cylindrical roller bearings, and thrust and ball bearings, through a network of authorized dealers to end users or directly to original equipment manufacturers. End-market sectors include general industrial, automotive, rail, energy, heavy truck, defense, agriculture, metals, mining, civil aerospace, construction, pulp and paper, and cement industries. Its segments are Engineered Bearings and Industrial Motion. Timken generates majority of its revenue in the United States of America.

Timken: A Financial Overview

Revenue Growth: Timken's revenue growth over a period of 3 months has faced challenges. As of 30 June, 2024, the company experienced a revenue decline of approximately -7.07%. This indicates a decrease in the company's 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 Industrials sector.

Key Profitability Indicators:

• Gross Margin: With a low gross margin of 31.6%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): Timken's EPS reflects a decline, falling below the industry average with a current EPS of 1.37.

Debt Management: Timken's debt-to-equity ratio stands notably higher than the industry average, reaching 0.82. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Insights into Valuation Metrics:

• Price to Earnings (P/E) Ratio: Timken's P/E ratio of 16.92 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.28 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 9.35, Timken could be considered undervalued.

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.

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

The Relevance of Insider Transactions

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

A Deep Dive into Insider Transaction Codes

When it comes to 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 indicates 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 Timken's Insider Trades.

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