Todd M Cleveland Takes Money Off The Table, Sells $3.30M In Patrick Industries Stock

On March 5, a recent SEC filing unveiled that Todd M Cleveland, Director at Patrick Industries PATK made an insider sell.

What Happened: Cleveland's decision to sell 27,600 shares of Patrick Industries was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total value of the sale is $3,302,137.

During Tuesday's morning session, Patrick Industries shares down by 0.0%, currently priced at $120.91.

Get to Know Patrick Industries Better

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 portion of revenue.

Breaking Down Patrick Industries's Financial Performance

Decline in Revenue: Over the 3 months period, Patrick Industries faced challenges, resulting in a decline of approximately -9.8% in revenue growth as of 31 December, 2023. This signifies a reduction in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Profitability Metrics:

• Gross Margin: Achieving a high gross margin of 22.9%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Patrick Industries's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 1.44.

Debt Management: Patrick Industries's debt-to-equity ratio is notably higher than the industry average. With a ratio of 1.15, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 18.62 is lower than the industry average, implying a discounted valuation for Patrick Industries's stock.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.77, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Patrick Industries's EV/EBITDA ratio, lower than industry averages at 9.57, indicates attractively priced shares.

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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Unmasking the Significance of Insider Transactions

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

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.

Exploring Key Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes 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.