At Cencora, Steven H Collis Chooses To Exercise Options, Resulting In $1.60M

Disclosed in a recent SEC filing on April 17, Collis, Chairman at Cencora COR, made a noteworthy transaction involving the exercise of company stock options.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday revealed that Collis, Chairman at Cencora in the Health Care sector, exercised stock options for 10,754 shares of COR stock. The exercise price of the options was $89.58 per share.

The Thursday morning update indicates Cencora shares down by 0.17%, currently priced at $238.22. At this value, Collis's 10,754 shares are worth $1,598,528.

Unveiling the Story Behind Cencora

Cencora is one of three domestic leading pharmaceutical wholesalers. It sources and distributes branded, generic, and specialty pharmaceutical products to pharmacies (retail chains, independent, and mail order), hospital networks, and healthcare providers. It and McKesson and Cardinal Health constitute over 90% of the U.S. pharmaceutical wholesale industry. Cencora also provides commercialization services for manufacturers of pharmaceuticals and medical devices, global specialty drug logistics (World Courier), and animal health product distribution (MWI Animal Health). Cencora expanded its international presence in 2021 by purchasing Alliance Healthcare, one of the leading drug wholesalers in Europe.

Cencora's Financial Performance

Revenue Growth: Over the 3 months period, Cencora showcased positive performance, achieving a revenue growth rate of 14.97% as of 31 December, 2023. This reflects a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Health Care sector.

Key Profitability Indicators:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 3.42%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Cencora's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 3.01.

Debt Management: Cencora's debt-to-equity ratio surpasses industry norms, standing at 5.24. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Insights into Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 25.99 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.18, 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): The company's EV/EBITDA ratio 13.34 is above the industry average, suggesting that the market values the company more highly for each unit of EBITDA. This could be attributed to factors such as strong growth prospects or superior operational efficiency.

Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.

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The Relevance of Insider Transactions

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Navigating the World of Insider Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.

Check Out The Full List Of Cencora's Insider Trades.

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