Chief Financial Officer Of Houlihan Lokey Makes $1.07M Sale

Lindsey Alley, Chief Financial Officer at Houlihan Lokey HLI, executed a substantial insider sell on November 30, according to an SEC filing.

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday, Alley sold 10,000 shares of Houlihan Lokey. The total transaction value is $1,074,800.

The latest market snapshot at Friday morning reveals Houlihan Lokey shares up by 0.15%, trading at $107.89.

Unveiling the Story Behind Houlihan Lokey

Houlihan Lokey Inc is an investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, valuation, and strategic consulting. The firm serves corporations, institutions, and governments worldwide with offices in the United States, Europe, and the Asia-Pacific region. The company operates in three segments. In the Corporate Finance business segment, it provides M&A and capital markets advisory services. Through the Financial Restructuring business segment, the company advises on some of the complex restructurings around the world. Financial and Valuation Advisory Services business segment provides valuation and financial opinion, and financial and strategic consulting practices in the United States.

Key Indicators: Houlihan Lokey's Financial Health

Revenue Growth: Houlihan Lokey's revenue growth over a period of 3 months has faced challenges. As of 30 September, 2023, the company experienced a revenue decline of approximately -4.61%. This indicates a decrease in the company's top-line earnings. When compared to others in the Financials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Holistic Profitability Examination:

• Gross Margin: The company faces challenges with a low gross margin of 36.5%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Houlihan Lokey's EPS reflects a decline, falling below the industry average with a current EPS of 1.04.

Debt Management: With a below-average debt-to-equity ratio of 0.25, Houlihan Lokey adopts a prudent financial strategy, indicating a balanced approach to debt management.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: Houlihan Lokey's P/E ratio of 28.73 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 4.04 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): A high EV/EBITDA ratio of 19.79 reflects market recognition of Houlihan Lokey's value, positioning it as more highly valued compared to industry peers.

Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.

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Illuminating the Importance of Insider Transactions

Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

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

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Transaction Codes Worth Your Attention

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Houlihan Lokey's Insider Trades.

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