Sell Alert: Paul Lundstrom Cashes Out $933K In Flex Stock

Paul Lundstrom, Chief Financial Officer at Flex FLEX, reported an insider sell on June 14, according to a new SEC filing.

What Happened: Lundstrom's recent Form 4 filing with the U.S. Securities and Exchange Commission on Friday unveiled the sale of 29,041 shares of Flex. The total transaction value is $933,098.

Flex's shares are actively trading at $31.36, experiencing a down of 2.06% during Friday's morning session.

About Flex

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's Financial Performance

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. 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.

Navigating Financial Profits:

• Gross Margin: With a low gross margin of -0.64%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): Flex's EPS is below the industry average. The company faced challenges with a current EPS of 0.967896. This suggests a potential decline in earnings.

Debt Management: With a high debt-to-equity ratio of 0.7, Flex faces challenges in effectively managing its debt levels, indicating potential financial strain.

Financial Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 16.17 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.53, 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, lower than industry averages at 10.03, indicates attractively priced shares.

Market Capitalization Analysis: The company's market capitalization surpasses industry averages, showcasing a dominant size relative to peers and suggesting a strong market position.

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Navigating the Impact of Insider Transactions on Investments

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

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

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

A Deep Dive into Insider Transaction Codes

When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates 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.