Build-A-Bear Workshop Recent Insider Activity

Disclosed on March 20, Eric R Fencl, CAO at Build-A-Bear Workshop BBW, executed a substantial insider sell as per the latest SEC filing.

What Happened: After conducting a thorough analysis, Fencl sold 22,331 shares of Build-A-Bear Workshop. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total transaction value is $650,711.

During Thursday's morning session, Build-A-Bear Workshop shares down by 0.0%, currently priced at $29.19.

Delving into Build-A-Bear Workshop's Background

Build-A-Bear Workshop Inc is a U.S.-based specialty retailer of customized stuffed animals and related products. The company operates through three segments. Its Direct-to-consumer segment includes the operating activities of corporately-managed locations and other retail delivery operations in the U.S., Canada, China, Denmark, Ireland, and the U.K., including the company's e-commerce sites and temporary stores. The international franchising segment includes the licensing activities of the company's franchise agreements with store locations in Europe, Asia, Australia, the Middle East, and Africa. The commercial segment includes the transactions with other businesses, mainly comprised of licensing the intellectual properties for third-party use and wholesale activities.

Understanding the Numbers: Build-A-Bear Workshop's Finances

Revenue Growth: Build-A-Bear Workshop's revenue growth over a period of 3 months has been noteworthy. As of 31 October, 2023, the company achieved a revenue growth rate of approximately 2.95%. This indicates a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Profitability Metrics:

• Gross Margin: The company sets a benchmark with a high gross margin of 52.65%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Build-A-Bear Workshop's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.53.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.7.

Analyzing Market Valuation:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 8.41 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.89, 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): Build-A-Bear Workshop's EV/EBITDA ratio at 6.0 suggests potential undervaluation, falling below industry averages.

Market Capitalization: Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.

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Why Pay Attention to Insider Transactions

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.

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.

Cracking Transaction Codes

When dissecting transactions, the focal point for investors is often those occurring 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 Build-A-Bear Workshop's Insider Trades.

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