Smart Money Move: Robert Perlmutter Grabs $119K Worth Of Chatham Lodging Stock

Disclosed in the latest SEC filing, a significant insider purchase on January 16, involves Robert Perlmutter, Board Member at Chatham Lodging CLDT.

What Happened: Perlmutter's recent move, as outlined in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, involves purchasing 11,150 shares of Chatham Lodging. The total transaction value is $119,974.

As of Wednesday morning, Chatham Lodging shares are down by 0.0%, currently priced at $10.49.

Unveiling the Story Behind Chatham Lodging

Chatham Lodging Trust is a U.S.-based real estate investment trust that invests in upscale extended-stay hotels. The firm operates across various states in the U.S., including California, New York, Texas, Florida, Minnesota, Massachusetts, and Pennsylvania among others. Substantially all of the company's assets are held and operated by its Operating Partnership, Chatham Lodging, LP. Chatham Lodging LP and its subsidiaries lease the overall company's hotels. The firm operates through a single segment because of the similar economic characteristics of its hotels. Chatham's revenue streams include Room, Food and beverage, and Other. Room comprises the majority of total revenue. Chatham's hotels operate under major brands, including Hilton, Marriott, and Hyatt.

Chatham Lodging's Economic Impact: An Analysis

Negative Revenue Trend: Examining Chatham Lodging's financials over 3 months reveals challenges. As of 30 September, 2023, the company experienced a decline of approximately -1.3% in revenue growth, reflecting a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Real Estate sector.

Insights into Profitability:

• Gross Margin: The company shows a low gross margin of 37.8%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Chatham Lodging's EPS reflects a decline, falling below the industry average with a current EPS of 0.11.

Debt Management: Chatham Lodging's debt-to-equity ratio is below the industry average at 0.64, reflecting a lower dependency on debt financing and a more conservative financial approach.

Financial Valuation:

• Price to Earnings (P/E) Ratio: Chatham Lodging's current Price to Earnings (P/E) ratio of 349.67 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: With a P/S ratio of 1.66 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): With an EV/EBITDA ratio lower than industry averages at 10.19, Chatham Lodging could be considered undervalued.

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

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

The Impact of Insider Transactions on Investments

Insider transactions serve as a piece of the puzzle in investment decisions, rather than the entire picture.

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.

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 Chatham Lodging's Insider Trades.

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