Altair Engineering Insider Trades Send A Signal

Disclosed on October 15, George J Christ, 10% Owner at Altair Engineering ALTR, executed a substantial insider sell as per the latest SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Tuesday showed that Christ sold 100,000 shares of Altair Engineering. The total transaction amounted to $9,523,390.

At Tuesday morning, Altair Engineering shares are down by 0.0%, trading at $95.5.

About Altair Engineering

Altair Engineering Inc is a provider of enterprise-class engineering software enabling origination of the entire product lifecycle from concept design to in-service operation. The integrated suite of software provided by the company optimizes design performance across multiple disciplines encompassing structures, motion, fluids, thermal management, system modeling, and embedded systems. It operates through two segments: Software which includes the portfolio of software products such as solvers and optimization technology products, modeling and visualization tools, industrial and concept design tools, and others; and Client Engineering Services which provides client engineering services to support customers. Majority of its revenue comes from the software segment.

Financial Milestones: Altair Engineering's Journey

Revenue Growth: Altair Engineering's revenue growth over a period of 3 months has been noteworthy. As of 30 June, 2024, the company achieved a revenue growth rate of approximately 5.41%. This indicates a substantial increase in the company's top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Analyzing Profitability Metrics:

• Gross Margin: With a high gross margin of 79.49%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): Altair Engineering's EPS reflects a decline, falling below the industry average with a current EPS of -0.06.

Debt Management: Altair Engineering's debt-to-equity ratio is below the industry average. With a ratio of 0.33, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 298.62 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 12.84, Altair Engineering'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): Altair Engineering's EV/EBITDA ratio stands at 95.97, surpassing industry benchmarks. This places the company in a position with a higher-than-average market valuation.

Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

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Why Pay Attention to Insider Transactions

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Unlocking the Meaning of Transaction Codes

When it comes to 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 indicates 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 Altair Engineering's Insider Trades.

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