Andrew Price Executes Sell Order: Offloads $495K In Encompass Health Stock

Andrew Price, Chief Accounting Officer at Encompass Health EHC, disclosed an insider sell on February 13, according to a recent SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Thursday outlined that Price executed a sale of 5,042 shares of Encompass Health with a total value of $495,578.

Monitoring the market, Encompass Health's shares up by 0.46% at $100.6 during Friday's morning.

Delving into Encompass Health's Background

Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals. Inpatient rehabilitation contributes the majority of the firm's revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. These hospitals are concentrated in the eastern half of the United States and Texas.

Understanding the Numbers: Encompass Health's Finances

Revenue Growth: Encompass Health displayed positive results in 3 months. As of 30 September, 2024, the company achieved a solid revenue growth rate of approximately 11.94%. This indicates a notable increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Health Care sector.

Analyzing Profitability Metrics:

• Gross Margin: The company excels with a remarkable gross margin of 95.51%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Encompass Health's EPS reflects a decline, falling below the industry average with a current EPS of 1.08.

Debt Management: With a below-average debt-to-equity ratio of 1.43, Encompass Health adopts a prudent financial strategy, indicating a balanced approach to debt management.

Analyzing Market Valuation:

• Price to Earnings (P/E) Ratio: Encompass Health's P/E ratio of 22.3 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 1.9 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio of 10.72 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

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Exploring the Significance of Insider Trading

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

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.

A Deep Dive into Insider Transaction Codes

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes 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 Encompass Health's Insider Trades.

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