Insider Activity Update: Manesh Dadlani Executes Options Exercise, Resulting In $409K At Tapestry

Disclosed in a recent SEC filing on November 18, Dadlani, VP at Tapestry TPR, made a noteworthy transaction involving the exercise of company stock options.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Monday showed that Dadlani, VP at Tapestry, a company in the Consumer Discretionary sector, just exercised stock options worth 11,262 shares of TPR stock with an exercise price of $19.03.

The Tuesday morning market activity shows Tapestry shares down by 2.02%, trading at $55.41. This implies a total value of $409,759 for Dadlani's 11,262 shares.

About Tapestry

Coach, Kate Spade, and Stuart Weitzman are Tapestry's fashion and accessory brands. The firm's products are sold through about 1,400 company-operated stores, wholesale channels, and e-commerce in North America (64% of fiscal 2024 sales), Europe, Asia (29% of fiscal 2024 sales), and elsewhere. Coach (76% of fiscal 2024 sales) is best known for affordable luxury leather products. Kate Spade (20% of fiscal 2023 sales) is known for colorful patterns and graphics. Women's handbags and accessories produced 69% of Tapestry's sales in fiscal 2024. Stuart Weitzman (4% of sales) generates virtually all its revenue from women's footwear.

Tapestry: Financial Performance Dissected

Negative Revenue Trend: Examining Tapestry's financials over 3 months reveals challenges. As of 30 September, 2024, the company experienced a decline of approximately -0.38% in revenue growth, reflecting a decrease in top-line earnings. When compared to others in the Consumer Discretionary sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Profitability Metrics:

• Gross Margin: Achieving a high gross margin of 75.28%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Tapestry's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.81.

Debt Management: Tapestry's debt-to-equity ratio is notably higher than the industry average. With a ratio of 2.95, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 16.39 is lower than the industry average, implying a discounted valuation for Tapestry's stock.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.99, Tapestry'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 lower than industry averages at 10.73, Tapestry could be considered undervalued.

Market Capitalization: Boasting an elevated market capitalization, the company surpasses industry averages. This signals substantial size and strong market recognition.

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Unmasking the Significance of Insider Transactions

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

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

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Unlocking the Meaning of Transaction Codes

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 Tapestry's Insider Trades.

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