526K Reasons To Be Bullish On Arcosa Stock

A new SEC filing reveals that STEVEN DEMETRIOU, Director at Arcosa ACA, made a notable insider purchase on September 12,.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that DEMETRIOU purchased 6,000 shares of Arcosa. The total transaction amounted to $526,200.

Monitoring the market, Arcosa's shares up by 2.07% at $89.59 during Friday's morning.

Get to Know Arcosa Better

Arcosa Inc is a manufacturer and producer of infrastructure-related products and services. It operates in three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment produces and sells construction aggregates and manufactures and sells trench shields and shoring products and services for infrastructure-related projects. The Transportation Products segment manufactures and sells products for the inland waterway and rail transportation industries. The Engineered Structures segment manufactures and sells products for energy-related businesses, including structural wind towers, telecommunication structures, steel utility structures for electricity transmission and distribution, and storage and distribution containers.

Unraveling the Financial Story of Arcosa

Revenue Growth: Arcosa displayed positive results in 3 months. As of 30 June, 2024, the company achieved a solid revenue growth rate of approximately 13.66%. This indicates a notable increase in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Navigating Financial Profits:

• Gross Margin: Achieving a high gross margin of 20.76%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): With an EPS below industry norms, Arcosa exhibits below-average bottom-line performance with a current EPS of 0.93.

Debt Management: With a below-average debt-to-equity ratio of 0.29, Arcosa adopts a prudent financial strategy, indicating a balanced approach to debt management.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: Arcosa's P/E ratio of 29.06 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.76, Arcosa'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 a lower-than-industry-average EV/EBITDA ratio of 12.71, Arcosa presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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The Impact of Insider Transactions on Investments

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

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.

Important Transaction Codes

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Arcosa's Insider Trades.

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