Options Exercise: Mark T Phelan At Accel Entertainment Realizes $69K

A large exercise of company stock options by Mark T Phelan, President at Accel Entertainment ACEL was disclosed in a new SEC filing on December 5, as part of an insider exercise.

What Happened: The latest Form 4 filing on Thursday with the U.S. Securities and Exchange Commission uncovered Phelan, President at Accel Entertainment, exercising stock options for 10,313 shares of ACEL. The total transaction was valued at $69,922.

During Thursday's morning session, Accel Entertainment shares down by 0.58%, currently priced at $12.02. Considering the current price, Phelan's 10,313 shares have a total value of $69,922.

Delving into Accel Entertainment's Background

Accel Entertainment Inc is a distributed gaming operator in the United States. It is engaged in the installation, maintenance, and operation of video gaming terminals. The company offers products to restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores. It operates slot machines and amusement equipment. The company generates a majority of its revenue from net gaming. Net gaming revenue represents net cash received from gaming activities, which is the difference between gaming wins and losses. Net gaming revenue includes the amount earned by location partners and is recognized at the time of gaming play.

A Deep Dive into Accel Entertainment's Financials

Positive Revenue Trend: Examining Accel Entertainment's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 5.12% as of 30 September, 2024, showcasing a substantial increase in 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.

Interpreting Earnings Metrics:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 29.92%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, Accel Entertainment exhibits below-average bottom-line performance with a current EPS of 0.06.

Debt Management: Accel Entertainment's debt-to-equity ratio is below the industry average at 2.68, reflecting a lower dependency on debt financing and a more conservative financial approach.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: Accel Entertainment's P/E ratio of 23.71 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.85, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 8.38, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

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Why Insider Activity Matters in Finance

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.

Considering the legal perspective, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, according to 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.

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

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

Breaking Down the Significance of Transaction Codes

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely 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 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 Accel Entertainment's Insider Trades.

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