Insider Selling: Michael P Hartung Unloads $369K Of Flex Stock

Michael P Hartung, Group President at Flex FLEX, executed a substantial insider sell on June 7, according to an SEC filing.

What Happened: After conducting a thorough analysis, Hartung sold 11,353 shares of Flex. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Friday. The total transaction value is $369,343.

The latest market snapshot at Friday morning reveals Flex shares down by 3.19%, trading at $31.23.

Delving into Flex's Background

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.

Flex: Financial Performance Dissected

Negative Revenue Trend: Examining Flex's financials over 3 months reveals challenges. As of 31 March, 2024, the company experienced a decline of approximately -20.02% in revenue growth, reflecting 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.

Insights into Profitability:

• 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): Flex's EPS reflects a decline, falling below the industry average 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 Metrics:

• Price to Earnings (P/E) Ratio: Flex's P/E ratio of 16.29 is below the industry average, suggesting the stock may be undervalued.

• 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): Flex's EV/EBITDA ratio at 10.1 suggests potential undervaluation, falling below industry averages.

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

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The Importance of Insider Transactions

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

A Deep Dive into Insider Transaction Codes

Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as outlined in Table I of the Form 4 filing. A P in Box 3 indicates 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.