Director At Waste Management Buys $89K of Stock

In a recent SEC filing, it was revealed that Bruce Chinn, Director at Waste Management WM, made a noteworthy insider purchase on July 16,.

What Happened: Chinn's recent move, as outlined in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, involves purchasing 418 shares of Waste Management. The total transaction value is $89,897.

In the Wednesday's morning session, Waste Management's shares are currently trading at $222.66, experiencing a up of 0.8%.

All You Need to Know About Waste Management

WM ranks as the largest integrated provider of traditional solid waste services in the United States, operating 263 active landfills and about 332 transfer stations. The company serves residential, commercial, and industrial end markets and is also a leading recycler in North America.

Key Indicators: Waste Management's Financial Health

Revenue Growth: Waste Management's revenue growth over a period of 3 months has been noteworthy. As of 31 March, 2024, the company achieved a revenue growth rate of approximately 5.46%. This indicates a substantial increase in the company's 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 Industrials sector.

Profitability Metrics: Unlocking Value

• Gross Margin: The company maintains a high gross margin of 39.14%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Waste Management's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 1.76.

Debt Management: Waste Management's debt-to-equity ratio is notably higher than the industry average. With a ratio of 2.27, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 36.15 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 4.33 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 18.04 reflects market recognition of Waste Management's value, positioning it as more highly valued compared to industry peers.

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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Exploring the Significance of Insider Trading

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

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.

Understanding Crucial Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously 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 Waste Management's Insider Trades.

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