Latham Group Insider Trades Send A Signal

A substantial insider sell was reported on November 15, by Sanjeev Bahl, Chief Operating Officer at Latham Group SWIM, based on the recent SEC filing.

What Happened: Bahl's decision to sell 25,904 shares of Latham Group was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Friday. The total value of the sale is $153,309.

In the Friday's morning session, Latham Group's shares are currently trading at $5.85, experiencing a down of 0.0%.

Delving into Latham Group's Background

Latham Group Inc is a designer, manufacturer, and marketer of in-ground residential swimming pools, liners, and covers in North America, Australia, and New Zealand. It derives a majority of its revenue from the United States.

Financial Milestones: Latham Group's Journey

Decline in Revenue: Over the 3 months period, Latham Group faced challenges, resulting in a decline of approximately -6.4% in revenue growth as of 30 September, 2024. This signifies a reduction in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Key Insights into Profitability Metrics:

• Gross Margin: The company faces challenges with a low gross margin of 32.35%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Latham Group's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.05.

Debt Management: Latham Group's debt-to-equity ratio stands notably higher than the industry average, reaching 0.75. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: Latham Group's current Price to Earnings (P/E) ratio of 58.5 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.33, Latham Group'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 an EV/EBITDA ratio of 13.45, the company's market valuation exceeds industry averages.

Market Capitalization: Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.

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Uncovering the Importance of Insider Activity

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

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.

Transaction Codes To Focus On

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 Latham Group's Insider Trades.

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