Insider Decision Unfolding At Toro: Angela Drake Exercises Options

A substantial insider activity was disclosed on December 28, as Drake, VP & CFO at Toro TTC, reported the exercise of a large sell of company stock options.

What Happened: Disclosed in a Form 4 filing on Thursday with the U.S. Securities and Exchange Commission, Drake, VP & CFO at Toro, executed a strategic derivative sale. This involved exercising stock options for 0 shares of TTC, resulting in a transaction value of $0.

Currently, Toro shares are trading down 0.53%, priced at $96.34 during Friday's morning. This values Drake's 0 shares at $0.

About Toro

The Toro Co manufactures turf maintenance and landscaping equipment. The company produces reel and rotary riding products, trim cutting and walking mowers, greens rollers, turf sprayer equipment, underground irrigation systems, heavy-duty walk-behind mowers, and sprinkler systems used for professional turf and landscape maintenance and construction. Its products are marketed through a network of distributors and dealers to predominantly professional users maintaining turfs and sports fields such as golf courses. Its operating segments are Professional which generates a substantial part of its revenue, and Residential segment. The company also produces snow plowers and ice management products. Its key revenue generating market is the United States.

Toro: A Financial Overview

Decline in Revenue: Over the 3 months period, Toro faced challenges, resulting in a decline of approximately -16.11% in revenue growth as of 31 October, 2023. This signifies a reduction 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 Industrials sector.

Profitability Metrics:

  • Gross Margin: The company excels with a remarkable gross margin of 33.52%, indicating superior cost efficiency and profitability compared to its industry peers.

  • Earnings per Share (EPS): Toro's EPS is below the industry average. The company faced challenges with a current EPS of 0.67. This suggests a potential decline in earnings.

Debt Management: Toro's debt-to-equity ratio is below the industry average. With a ratio of 0.77, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Financial Valuation Breakdown:

  • Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 30.94 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

  • Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 2.24, Toro's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

  • EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Toro's EV/EBITDA ratio, surpassing industry averages at 19.07, positions it with an above-average valuation in the market.

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

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Uncovering the Importance of Insider Activity

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Exploring Key Transaction Codes

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely 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 Toro's Insider Trades.

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

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