Insider Selling: Elliott Investment Management LP Unloads $475K Of Peabody Energy Stock

It was reported on December 21, that Elliott Investment Management LP, 10% Owner at Peabody Energy BTU executed a significant insider sell, according to an SEC filing.

What Happened: After conducting a thorough analysis, LP sold 20,000 shares of Peabody Energy. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The total transaction value is $475,200.

Peabody Energy shares are trading down 0.54% at $23.82 at the time of this writing on Thursday morning.

Unveiling the Story Behind Peabody Energy

Peabody Energy Corp is a producer of metallurgical and thermal coal. It also markets and brokers coal, both as principal and agent, and trades coal and freight-related contracts. The company operates in the following segment: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Midwestern U.S. Mining, Other U.S. Thermal Mining, and Corporate and Other.

Understanding the Numbers: Peabody Energy's Finances

Revenue Growth: Peabody Energy'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 -19.63%. This indicates a decrease in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Energy sector.

Evaluating Earnings Performance:

• Gross Margin: The company faces challenges with a low gross margin of 25.51%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, Peabody Energy exhibits below-average bottom-line performance with a current EPS of 0.9.

Debt Management: With a below-average debt-to-equity ratio of 0.1, Peabody Energy adopts a prudent financial strategy, indicating a balanced approach to debt management.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: The P/E ratio of 3.13 is lower than the industry average, implying a discounted valuation for Peabody Energy's stock.

• Price to Sales (P/S) Ratio: With a P/S ratio of 0.71 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 1.36, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

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

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

Uncovering the Importance of Insider Activity

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

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.

Understanding Crucial 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 Peabody Energy's Insider Trades.

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