Strategic Sale: Tony Thompson Decides To Exercise Options Worth $355K At Eagle Materials

A large exercise of company stock options by Tony Thompson, Senior Vice President at Eagle Materials EXP was disclosed in a new SEC filing on November 7, as part of an insider exercise.

What Happened: In an insider options sale disclosed in a Form 4 filing on Thursday with the U.S. Securities and Exchange Commission, Thompson, Senior Vice President at Eagle Materials, exercised stock options for 1,401 shares of EXP. The transaction value amounted to $355,910.

During Friday's morning session, Eagle Materials shares up by 0.87%, currently priced at $314.25. Considering the current price, Thompson's 1,401 shares have a total value of $355,910.

All You Need to Know About Eagle Materials

Eagle Materials Inc produces and sells construction products and building materials. Construction products include cement, slag, concrete, and aggregates and building materials include cement and gypsum wallboard, and are sold to the construction and building industries. The firm organizes itself into two sectors: Heavy Materials, which includes the Cement and Concrete and Aggregates segments, and Light Materials, which includes the Gypsum Wallboard and Recycled Paperboard segments.

Understanding the Numbers: Eagle Materials's Finances

Revenue Growth: Eagle Materials's remarkable performance in 3 months is evident. As of 30 September, 2024, the company achieved an impressive revenue growth rate of 0.22%. This signifies a substantial increase in the company's top-line earnings. When compared to others in the Materials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Key Profitability Indicators:

• Gross Margin: The company maintains a high gross margin of 32.69%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Eagle Materials's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 4.29.

Debt Management: Eagle Materials's debt-to-equity ratio is notably higher than the industry average. With a ratio of 0.77, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Financial Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 22.03 is lower than the industry average, implying a discounted valuation for Eagle Materials's stock.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 4.71 as compared to the industry average, the stock might be considered overvalued 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 13.96, Eagle Materials could be considered undervalued.

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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Exploring the Significance of Insider Trading

Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

The Insider's Guide to Important Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously 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 indicates 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 Eagle Materials's Insider Trades.

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