Sell Alert: BRYAN DEBOER Cashes Out $6.13M In Lithia Motors Stock

On November 13, a recent SEC filing unveiled that BRYAN DEBOER, Chief Executive Officer at Lithia Motors LAD made an insider sell.

What Happened: After conducting a thorough analysis, DEBOER sold 15,846 shares of Lithia Motors. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total transaction value is $6,127,897.

The latest update on Thursday morning shows Lithia Motors shares down by 1.32%, trading at $371.14.

All You Need to Know About Lithia Motors

Lithia Motors is a retailer of new and used vehicles and related services. The company offers over 50 brands of vehicles at nearly 500 stores globally across the US, Canada, and UK. The company has expanded largely through the acquisition of dealerships in smaller regional markets but now seeks to grow in any part of the US and we expect more deals over time in the US and, at times, abroad. Annual revenue in 2023 was $31 billion and we see over $50 billion possible in a few years. The US was 90% of 2023 revenue and the UK second at 6%, the latter should rise to around 20% with the 2024 Pendragon acquisition. In 2023, new-car sales were about 49% of total revenue. Lithia was founded in 1946, went public in 1996, and is the largest US auto dealer. It is based in Medford, Oregon.

Lithia Motors: Financial Performance Dissected

Revenue Growth: Lithia Motors's remarkable performance in 3 months is evident. As of 30 September, 2024, the company achieved an impressive revenue growth rate of 11.41%. This signifies a substantial increase in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company excelled with a growth rate higher than the average among peers.

Insights into Profitability:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 15.51%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Lithia Motors's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 7.82.

Debt Management: Lithia Motors's debt-to-equity ratio is below the industry average. With a ratio of 2.13, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Market Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 12.84, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.3, 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 12.14, Lithia Motors could be considered undervalued.

Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.

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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.

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Transaction Codes Worth Your Attention

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes 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 Lithia Motors's Insider Trades.

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