Alexander Charles Mathis Executes Sell Order: Offloads $140K In ScanSource Stock

On May 13, a recent SEC filing unveiled that Alexander Charles Mathis, Board Member at ScanSource SCSC made an insider sell.

What Happened: Mathis's recent move involves selling 3,000 shares of ScanSource. This information is documented in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The total value is $140,890.

At Tuesday morning, ScanSource shares are down by 1.73%, trading at $46.0.

Delving into ScanSource's Background

ScanSource Inc provides value-added services for technology manufacturers and sells to resellers in specialty technology markets. The firm's operations are organized in two segments: Specialty Technology Solutions and Modern Communications and Cloud. It generates maximum revenue from the Specialty Technology Solutions segment. The Specialty Technology Solutions segment includes the Company's business in mobility and barcode, POS, payments, security and networking technologies. Geographically, it derives a majority of revenue from the United States.

Financial Insights: ScanSource

Decline in Revenue: Over the 3 months period, ScanSource faced challenges, resulting in a decline of approximately -15.01% in revenue growth as of 31 March, 2024. This signifies a reduction in the company's 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 Information Technology sector.

Key Insights into Profitability Metrics:

• Gross Margin: The company shows a low gross margin of 12.55%, suggesting potential challenges in cost control and profitability compared to its peers.

• Earnings per Share (EPS): ScanSource's EPS is below the industry average. The company faced challenges with a current EPS of 0.51. This suggests a potential decline in earnings.

Debt Management: With a below-average debt-to-equity ratio of 0.15, ScanSource adopts a prudent financial strategy, indicating a balanced approach to debt management.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: ScanSource's P/E ratio of 15.15 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.34 is lower than the industry average, implying a discounted valuation for ScanSource's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): ScanSource's EV/EBITDA ratio at 7.85 suggests potential undervaluation, falling below industry averages.

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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Why Pay Attention to Insider Transactions

Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

Considering the legal perspective, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, according to 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.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.

A Deep Dive into Insider 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 ScanSource's Insider Trades.

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