Sell Alert: JIM WALTON Cashes Out $442.77M In Walmart Stock

JIM WALTON, 10% Owner at Walmart WMT, disclosed an insider sell on September 10, according to a recent SEC filing.

What Happened: WALTON's recent Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday unveiled the sale of 5,746,226 shares of Walmart. The total transaction value is $442,774,830.

Walmart shares are trading down 1.36% at $77.74 at the time of this writing on Wednesday morning.

Get to Know Walmart Better

Walmart serves as the preeminent retailer in the United States, with its strategy predicated on superior operating efficiency and offering the lowest priced goods to consumers to drive robust store traffic and product turnover. Walmart augmented its low-price business strategy by offering a convenient one-stop shopping destination with the opening of its first supercenter in 1988.Today, Walmart operates over 4,600 stores in the United States (5,200 including Sam's Club) and over 10,000 stores globally. Walmart generated over $440 billion in domestic namesake sales in fiscal 2024, with Sam's Club contributing another $86 billion to the company's top line. Internationally, Walmart generated $115 billion in sales. The retailer serves around 240 million customers globally each week.

Key Indicators: Walmart's Financial Health

Revenue Growth: Walmart's remarkable performance in 3 months is evident. As of 31 July, 2024, the company achieved an impressive revenue growth rate of 4.77%. This signifies a substantial increase in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Staples sector.

Key Profitability Indicators:

• Gross Margin: The company sets a benchmark with a high gross margin of 25.11%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Walmart's EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 0.56.

Debt Management: Walmart's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.73.

Market Valuation:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 41.05, Walmart'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 0.96, Walmart'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): Walmart's EV/EBITDA ratio of 18.59 exceeds industry averages, indicating a premium valuation in the market

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

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Why Insider Transactions Are Important

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.

Deciphering Transaction Codes in Insider Filings

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 Walmart's Insider Trades.

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