Jonathan C Stein Takes Money Off The Table, Sells $279K In Hess Midstream Stock

On November 13, a recent SEC filing unveiled that Jonathan C Stein, Chief Financial Officer at Hess Midstream HESM made an insider sell.

What Happened: Stein's decision to sell 7,923 shares of Hess Midstream was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the sale is $279,840.

As of Wednesday morning, Hess Midstream shares are up by 1.55%, currently priced at $35.35.

Unveiling the Story Behind Hess Midstream

Hess Midstream LP owns, operates, develops, and acquires a diverse set of midstream assets and provides fee-based services to Hess and third-party customers. It conducts its business through three operating segments: gathering, processing and storage, and terminaling and exporting. The company derives the maximum revenue from the gathering segment. Its gathering segment consists of the following assets namely Natural Gas Gathering and Compression; Crude Oil Gathering and Produced Water Gathering and Disposal.

A Deep Dive into Hess Midstream's Financials

Revenue Growth: Over the 3 months period, Hess Midstream showcased positive performance, achieving a revenue growth rate of 4.17% as of 30 September, 2024. This reflects a substantial increase in the company's top-line earnings. When compared to others in the Energy sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Profitability Metrics:

• Gross Margin: With a high gross margin of 86.36%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, Hess Midstream exhibits below-average bottom-line performance with a current EPS of 0.63.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 6.57, caution is advised due to increased financial risk.

Analyzing Market Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 14.75, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 1.92, 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): At 6.45, Hess Midstream's EV/EBITDA ratio reflects a below-par valuation compared to industry averages signalling undervaluation

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 Pay Attention to Insider Transactions

Insider transactions serve as a piece of the puzzle in investment decisions, rather than the entire picture.

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.

Important Transaction Codes

When dissecting transactions, the focal point for investors is often those occurring 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 Hess Midstream's Insider Trades.

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