Insider Unloading: SUDHIR GOPALSWAMY Sells $1.43M Worth Of ON Semiconductor Shares

SUDHIR GOPALSWAMY, Group President at ON Semiconductor ON, disclosed an insider sell on December 18, according to a recent SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday outlined that GOPALSWAMY executed a sale of 21,082 shares of ON Semiconductor with a total value of $1,426,041.

ON Semiconductor's shares are actively trading at $65.84, experiencing a up of 1.41% during Thursday's morning session.

About ON Semiconductor

Onsemi is a supplier of power semiconductors and sensors focused on the automotive and industrial markets. Onsemi is the second-largest power chipmaker in the world and the largest supplier of image sensors to the automotive market. While the firm used to be highly vertically integrated, it now pursues a hybrid manufacturing strategy for flexible capacity. Onsemi is pivoting to focus on emerging applications like electric vehicles, autonomous vehicles, industrial automation, and renewable energy.

ON Semiconductor: Financial Performance Dissected

Revenue Growth: ON Semiconductor's revenue growth over a period of 3 months has faced challenges. As of 30 September, 2024, the company experienced a revenue decline of approximately -19.21%. This indicates a decrease in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Information Technology sector.

Holistic Profitability Examination:

• Gross Margin: The company shows a low gross margin of 45.37%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): ON Semiconductor's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.94.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 0.39, caution is advised due to increased financial risk.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 16.11, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The P/S ratio of 3.83 is lower than the industry average, implying a discounted valuation for ON Semiconductor's stock 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 10.44, ON Semiconductor could be considered undervalued.

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

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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.

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.

Cracking Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.

Check Out The Full List Of ON Semiconductor's Insider Trades.

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