Group President At Flex Sells $410K Of Stock

Disclosed on June 7, Tan Kwang Hooi, Group President at Flex FLEX, executed a substantial insider sell as per the latest SEC filing.

What Happened: Hooi's recent Form 4 filing with the U.S. Securities and Exchange Commission on Friday unveiled the sale of 12,626 shares of Flex. The total transaction value is $410,773.

Monitoring the market, Flex's shares up by 0.22% at $32.33 during Friday's morning.

Discovering Flex: A Closer Look

Flex Ltd is a contract manufacturing company providing comprehensive electronics design, manufacturing, and product management services to electronics and technology companies. The company's operating segments include Flex Agility Solutions (FAS) and Flex Reliability Solutions (FRS). Flex Agility Solutions segment includes markets such as Communications, Enterprise and Cloud; Lifestyle; and Consumer Devices. Flex Reliability Solutions segment includes markets such as Automotive, Health Solutions, and Industrial.

Unraveling the Financial Story of Flex

Revenue Challenges: Flex's revenue growth over 3 months faced difficulties. As of 31 March, 2024, the company experienced a decline of approximately -20.02%. This indicates a decrease in top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Interpreting Earnings Metrics:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of -0.64%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, Flex exhibits below-average bottom-line performance with a current EPS of 0.967896.

Debt Management: Flex's debt-to-equity ratio stands notably higher than the industry average, reaching 0.7. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 16.29 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.54, 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): With an EV/EBITDA ratio lower than industry benchmarks at 10.1, Flex presents an attractive value opportunity.

Market Capitalization Analysis: With a profound presence, the company's market capitalization is above industry averages. This reflects substantial size and strong market recognition.

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Why Insider Transactions Are Key in Investment Decisions

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

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

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

A Closer Look at Important Transaction Codes

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely 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 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 Flex's Insider Trades.

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