Chatham Lodging Recent Insider Activity

Edwin Brewer JR, Director at Chatham Lodging CLDT, reported an insider buy on January 16, according to a new SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday unveiled that JR made a notable purchase of 6,504 shares of Chatham Lodging, valuing at $69,983.

The latest update on Wednesday morning shows Chatham Lodging shares down by 0.0%, trading at $10.49.

Get to Know Chatham Lodging Better

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.

Unraveling the Financial Story of Chatham Lodging

Revenue Growth: Chatham Lodging'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 -1.3%. This indicates a decrease in the company's top-line earnings. When compared to others in the Real Estate sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Key Profitability Indicators:

• 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 is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.11.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.64.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: A higher-than-average P/E ratio of 349.67 suggests caution, as the stock may be overvalued in the eyes of investors.

• Price to Sales (P/S) Ratio: The P/S ratio of 1.66 is lower than the industry average, implying a discounted valuation for Chatham Lodging's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 10.19 is below the industry average, indicating that it may be relatively undervalued compared to peers.

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

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Delving Into the Significance of Insider Transactions

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

The Insider's Guide to Important Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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.