Insider Decision: Aaron Birnbaum Offloads $1.47M Worth Of Herc Hldgs Stock

Making a noteworthy insider sell on August 27, Aaron Birnbaum, SVP & Chief Operating Officer at Herc Hldgs HRI, is reported in the latest SEC filing.

What Happened: Birnbaum opted to sell 10,000 shares of Herc Hldgs, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The transaction's total worth stands at $1,467,056.

The latest market snapshot at Wednesday morning reveals Herc Hldgs shares down by 0.0%, trading at $143.88.

Unveiling the Story Behind Herc Hldgs

Herc Holdings is an equipment rental company that was spun out of Hertz Global in 2016. It is currently the third-largest equipment rental company (4% market share) in North America, after United Rentals and Sunbelt Rentals, with a fleet size of $6.4 billion. It serves commercial and residential construction customers, the environmental sector, industrial entities, and entertainment production companies. During much of its 50-year-plus history, the company has rented equipment such as aerial lifts to its customers for intermittent use. More recently, it has broadened its catalog to include a host of specialty items. Separately, Herc Holdings' strategy now incorporates long-term rentals to industrial customers where Herc maintains its own staff at the customer site.

Herc Hldgs: Delving into Financials

Revenue Growth: Over the 3 months period, Herc Hldgs showcased positive performance, achieving a revenue growth rate of 5.74% as of 30 June, 2024. This reflects 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.

Profitability Metrics: Unlocking Value

• Gross Margin: The company maintains a high gross margin of 36.08%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Herc Hldgs's EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 2.46.

Debt Management: Herc Hldgs's debt-to-equity ratio is notably higher than the industry average. With a ratio of 3.53, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Market Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 12.08 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 1.2, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 6.04, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

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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Why Insider Transactions Are Important

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

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.

Important 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 Herc Hldgs's Insider Trades.

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