Director Of Nordstrom Makes $164K Buy

A notable insider purchase on June 4, was reported by Guy Persaud, Director at Nordstrom JWN, based on the most recent SEC filing.

What Happened: In a Form 4 filing on Tuesday with the U.S. Securities and Exchange Commission, it was disclosed that Persaud bought 7,170 shares of Nordstrom, amounting to a total of $164,981.

The latest market snapshot at Wednesday morning reveals Nordstrom shares up by 0.13%, trading at $22.32.

Discovering Nordstrom: A Closer Look

Nordstrom is a fashion retailer that operates about 93 department stores and more than 260 off-price Nordstrom Rack stores. The company also operates both full- and off-price e-commerce sites, two clearance stores, and seven Local locations. Nordstrom's largest merchandise categories are women's apparel (27% of 2023 sales), shoes (26% of 2023 sales), men's apparel (15% of 2023 sales), and beauty (13% of 2023 sales). Nordstrom, which traces its history to a shoe store opened in Seattle in 1901, continues to be partially owned and managed by members of the eponymous family.

Breaking Down Nordstrom's Financial Performance

Revenue Challenges: Nordstrom's revenue growth over 3 months faced difficulties. As of 30 April, 2024, the company experienced a decline of approximately -24.55%. This indicates a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Consumer Discretionary sector.

Key Insights into Profitability Metrics:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 33.94%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Nordstrom's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of -0.24.

Debt Management: Nordstrom's debt-to-equity ratio surpasses industry norms, standing at 5.07. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 12.05 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.25 is lower than the industry average, implying a discounted valuation for Nordstrom's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry benchmarks at 5.72, Nordstrom presents an attractive value opportunity.

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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Illuminating the Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

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.

A Deep Dive into Insider 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 Nordstrom's Insider Trades.

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