Houlihan Lokey General Counsel Trades $180K In Company Stock

Christopher M Crain, General Counsel at Houlihan Lokey HLI, reported an insider sell on December 19, according to a new SEC filing.

What Happened: After conducting a thorough analysis, Crain sold 1,500 shares of Houlihan Lokey. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total transaction value is $180,180.

The latest market snapshot at Wednesday morning reveals Houlihan Lokey shares down by 0.0%, trading at $119.63.

Get to Know Houlihan Lokey Better

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.

Breaking Down Houlihan Lokey's Financial Performance

Negative Revenue Trend: Examining Houlihan Lokey's financials over 3 months reveals challenges. As of 30 September, 2023, the company experienced a decline of approximately -4.61% in revenue growth, reflecting a decrease in 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 Financials sector.

Evaluating Earnings Performance:

• Gross Margin: The company shows a low gross margin of 36.5%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Houlihan Lokey's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 1.04.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.25.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The P/E ratio of 31.9 is lower than the industry average, implying a discounted valuation for Houlihan Lokey's stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 4.48 is above industry norms, reflecting an elevated valuation for Houlihan Lokey's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Houlihan Lokey's EV/EBITDA ratio of 22.01 exceeds industry averages, indicating a premium valuation in the market

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

Why Insider Transactions Are Important

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

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

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Deciphering Transaction Codes in Insider Filings

Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as outlined in Table I of the Form 4 filing. A P in Box 3 indicates 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 Houlihan Lokey's Insider Trades.

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