Insider Decision: Phil Horlock Exercises Options At Blue Bird For $1.61M

A large exercise of company stock options by Phil Horlock, Chief Executive Officer at Blue Bird BLBD was disclosed in a new SEC filing on August 26, as part of an insider exercise.

What Happened: Disclosed in a Form 4 filing on Monday with the U.S. Securities and Exchange Commission, Horlock, Chief Executive Officer at Blue Bird, executed a strategic derivative sale. This involved exercising stock options for 48,239 shares of BLBD, resulting in a transaction value of $1,606,358.

Blue Bird shares are trading, exhibiting down of 0.2% and priced at $49.5 during Tuesday's morning. This values Horlock's 48,239 shares at $1,606,358.

Discovering Blue Bird: A Closer Look

Blue Bird Corp is an American bus manufacturing company. It has its operations in two segments. The Bus segment involves the design, engineering, manufacture and sales of school buses and extended warranties; and the Parts segment which includes the sales of replacement bus parts. It carries its operations in the United States, Canada, and the rest of the world. The majority of its sales are derived from the United States through its bus manufacturing business.

Understanding the Numbers: Blue Bird's Finances

Positive Revenue Trend: Examining Blue Bird's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 13.28% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Industrials sector.

Navigating Financial Profits:

• Gross Margin: The company faces challenges with a low gross margin of 20.8%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Blue Bird's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.89.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.71.

Market Valuation:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 16.49, Blue Bird's stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.26, Blue Bird'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): With an EV/EBITDA ratio of 10.56, 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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Uncovering the Importance of Insider Activity

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.

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

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Navigating the World of Insider 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 Blue Bird's Insider Trades.

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