Insider Unloading: Revathi Advaithi Sells $1.16M Worth Of Flex Shares

Revealing a significant insider sell on June 19, Revathi Advaithi, Chief Executive Officer at Flex FLEX, as per the latest SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday outlined that Advaithi executed a sale of 37,170 shares of Flex with a total value of $1,163,421.

The latest market snapshot at Wednesday morning reveals Flex shares up by 0.13%, trading at $31.62.

Unveiling the Story Behind 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.

A Deep Dive into Flex's Financials

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.

Navigating Financial Profits:

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

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 15.95, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• 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): The company's EV/EBITDA ratio 9.9 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.

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Why Insider Activity Matters in Finance

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Understanding Crucial Transaction Codes

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely 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.