Insider Selling: Jason Phillips Unloads $11.74M Of Celestica Stock

On February 5, a recent SEC filing unveiled that Jason Phillips, President at Celestica CLS made an insider sell.

What Happened: Phillips's recent Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday unveiled the sale of 95,979 shares of Celestica. The total transaction value is $11,736,312.

Celestica shares are trading down 6.53% at $134.29 at the time of this writing on Thursday morning.

Delving into Celestica's Background

Celestica Inc offers supply chain solutions. The company has two operating and reportable segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). The ATS segment consists of the ATS end market and is comprised of the Aerospace and Defense, Industrial, health tech, and Capital Equipment businesses. Its Capital Equipment business is comprised of the semiconductor, display, and robotics equipment businesses, and the CCS segment consists of Communications and Enterprise end markets, Enterprise end market is comprised of its servers and storage businesses. The company generates a majority of its revenue from the Connectivity & Cloud Solutions segment.

Celestica: Financial Performance Dissected

Positive Revenue Trend: Examining Celestica's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 1.85% as of 31 December, 2024, showcasing a substantial increase in top-line earnings. When compared to others in the Information Technology sector, the company excelled with a growth rate higher than the average among peers.

Key Profitability Indicators:

• Gross Margin: The company faces challenges with a low gross margin of 11.67%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Celestica's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 1.3.

Debt Management: Celestica's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.42.

Financial Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 39.8 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 1.77 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 23.13 positions the company as being more valued compared to industry benchmarks.

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

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The Impact of Insider Transactions on Investments

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

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

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

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

The Insider's Guide to Important 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 Celestica's Insider Trades.

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