Insider Unloading: Todd M Cleveland Sells $2.22M Worth Of Patrick Industries Shares

Making a noteworthy insider sell on December 15, Todd M Cleveland, Board Member at Patrick Industries PATK, is reported in the latest SEC filing.

What Happened: Cleveland's recent Form 4 filing with the U.S. Securities and Exchange Commission on Friday unveiled the sale of 25,000 shares of Patrick Industries. The total transaction value is $2,222,598.

Patrick Industries shares are trading down 0.0% at $93.45 at the time of this writing on Friday morning.

About Patrick Industries

Patrick Industries Inc makes and sells building products and materials for recreational vehicles and manufactured housing. The company is organized into two segments based on product type: manufacturing and distribution. The manufacturing segment, which generates the majority of revenue, sells laminated and vinyl products that include furniture, shelving, cabinets, bath fixtures, and countertops. The distribution segment sells prefinished wall and ceiling panels, as well as electrical and plumbing products for the RV and manufactured-housing industries. One of the firm's RV customers makes up a significant portion of revenue. Nearly all of Patrick Industries' revenue comes from North America.

Breaking Down Patrick Industries's Financial Performance

Negative Revenue Trend: Examining Patrick Industries's financials over 3 months reveals challenges. As of 30 September, 2023, the company experienced a decline of approximately -22.12% in revenue growth, reflecting a decrease in 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 Consumer Discretionary sector.

Key Profitability Indicators:

• Gross Margin: The company excels with a remarkable gross margin of 22.99%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Patrick Industries's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 1.84.

Debt Management: With a below-average debt-to-equity ratio of 1.25, Patrick Industries adopts a prudent financial strategy, indicating a balanced approach to debt management.

Exploring Valuation Metrics Landscape:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 13.75 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a P/S ratio of 0.58 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 8.08, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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The Impact of Insider Transactions on Investments

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

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.

Essential Transaction Codes Unveiled

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 Patrick Industries's Insider Trades.

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