Director Of Daktronics Makes $84K Buy

A new SEC filing reveals that Kevin P. McDermott, Director at Daktronics DAKT, made a notable insider purchase on September 11,.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday unveiled that McDermott made a notable purchase of 7,160 shares of Daktronics, valuing at $84,989.

As of Thursday morning, Daktronics shares are up by 0.9%, currently priced at $12.3.

All You Need to Know About Daktronics

Daktronics Inc designs and manufactures electronic scoreboards, programmable display systems, and large-screen video displays for sporting, commercial, and transportation applications. It is engaged in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support. The company offers a complete line of products, from small scoreboards and electronic displays to large multimillion-dollar video display systems as well as related control, timing, and sound systems. The company has five reportable segments: Commercial, Live Events, High School Park and Recreation, Transportation, and International. The company makes the majority of its revenue from Live events.

Daktronics: Delving into Financials

Decline in Revenue: Over the 3 months period, Daktronics faced challenges, resulting in a decline of approximately -2.77% in revenue growth as of 31 July, 2024. This signifies a reduction 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 Information Technology sector.

Interpreting Earnings Metrics:

• Gross Margin: The company shows a low gross margin of 26.4%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Daktronics's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of -0.11.

Debt Management: Daktronics's debt-to-equity ratio is below the industry average. With a ratio of 0.32, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Analyzing Market Valuation:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 58.05, Daktronics's stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.7, which is lower than the industry average. This suggests a possible undervaluation based on 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 6.15, Daktronics could be considered undervalued.

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

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Why Insider Transactions Are Key in Investment Decisions

Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Understanding Crucial Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously 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 Daktronics's Insider Trades.

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