Options Movement At Allison Transmission: David Graziosi Exercises Worth $636K

In a new SEC filing on November 27, it was revealed that Graziosi, Chair at Allison Transmission ALSN, executed a significant exercise of company stock options.

What Happened: A notable Form 4 filing on Wednesday with the U.S. Securities and Exchange Commission revealed that Graziosi, Chair at Allison Transmission, exercised stock options for 8,935 shares of ALSN, resulting in a transaction value of $636,440.

The latest update on Thursday morning shows Allison Transmission shares down by 0.83%, trading at $118.58. At this price, Graziosi's 8,935 shares are worth $636,440.

All You Need to Know About Allison Transmission

Allison Transmission is the largest manufacturer of fully automatic transmissions for commercial vehicles. The company's automatic transmissions allow customers to achieve better fuel and operator efficiency than less expensive manual and automated manual transmissions. Allison serves several end markets, including on- and off-highway equipment and military vehicles. Its on-highway business has about 60% global market share. The company's transmissions can be found in Class 4-8 trucks, buses, and a limited number of large passenger vehicles (heavy-duty pickup trucks and motor homes). Allison also produces electric hybrid propulsion systems and is developing e-powertrains.

Financial Milestones: Allison Transmission's Journey

Revenue Growth: Over the 3 months period, Allison Transmission showcased positive performance, achieving a revenue growth rate of 11.96% as of 30 September, 2024. This reflects a substantial increase 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 Industrials sector.

Key Profitability Indicators:

• Gross Margin: With a high gross margin of 48.06%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 2.3, Allison Transmission showcases strong earnings per share.

Debt Management: Allison Transmission's debt-to-equity ratio surpasses industry norms, standing at 1.48. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Analyzing Market Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 14.6, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 3.31, Allison Transmission'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): Allison Transmission's EV/EBITDA ratio, surpassing industry averages at 10.74, positions it with an above-average valuation in the market.

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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The Importance of Insider Transactions

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

In the context of 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 outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

Deciphering Transaction Codes in Insider Filings

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 Allison Transmission's Insider Trades.

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