Alexander J Buehler At Energy Recovery Capitalizes: Options Exercised, Resulting In $302K

A substantial insider activity was disclosed on August 21, as Buehler, Board Member at Energy Recovery ERII, reported the exercise of a large sell of company stock options.

What Happened: A notable Form 4 filing on Wednesday with the U.S. Securities and Exchange Commission revealed that Buehler, Board Member at Energy Recovery, exercised stock options for 19,841 shares of ERII, resulting in a transaction value of $302,773.

Energy Recovery shares are trading down 0.0% at $18.18 at the time of this writing on Thursday morning. Since the current price is $18.18, this makes Buehler's 19,841 shares worth $302,773.

All You Need to Know About Energy Recovery

Energy Recovery Inc is an engineering-driven technology company. It is engaged in engineering, designing, manufacturing and supplying solutions that make industrial processes more efficient and sustainable. The company operates in three segments, Water, Emerging Technologies and Corporate. It offers energy recovery devices (ERDs) and pumps as well as related products and services to the global reverse osmosis desalination market. The company derives a majority of the revenue from the Water segment. Geographically, the company operates in the U.S. and other international countries.

Energy Recovery's Economic Impact: An Analysis

Revenue Growth: Energy Recovery's revenue growth over a period of 3 months has been noteworthy. As of 30 June, 2024, the company achieved a revenue growth rate of approximately 31.25%. This indicates 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.

Interpreting Earnings Metrics:

• Gross Margin: The company sets a benchmark with a high gross margin of 64.58%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, Energy Recovery exhibits below-average bottom-line performance with a current EPS of -0.01.

Debt Management: With a below-average debt-to-equity ratio of 0.06, Energy Recovery adopts a prudent financial strategy, indicating a balanced approach to debt management.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: Energy Recovery's stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 51.94.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 7.93, Energy Recovery's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 42.45 is above the industry average, suggesting that the market values the company more highly for each unit of EBITDA. This could be attributed to factors such as strong growth prospects or superior operational efficiency.

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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Why Pay Attention to Insider Transactions

Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

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.

Understanding Crucial Transaction Codes

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely outlined in Table I of the Form 4 filing. A P in Box 3 indicates 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 Energy Recovery's Insider Trades.

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