Insider Decision: Brian Rich Offloads $263K Worth Of CMS Energy Stock

Brian Rich, Senior Vice President at CMS Energy CMS, reported an insider sell on August 1, according to a new SEC filing.

What Happened: Rich's recent Form 4 filing with the U.S. Securities and Exchange Commission on Thursday unveiled the sale of 4,000 shares of CMS Energy. The total transaction value is $263,982.

CMS Energy's shares are actively trading at $65.61, experiencing a down of 0.37% during Friday's morning session.

Unveiling the Story Behind CMS Energy

CMS Energy is an energy holding company with three principal businesses. Its regulated utility, Consumers Energy, provides regulated natural gas service to 1.8 million customers and electric service to 1.9 million customers in Michigan. CMS Enterprises is engaged in wholesale power generation, including contracted renewable energy. CMS sold EnerBank in October 2021.

Breaking Down CMS Energy's Financial Performance

Revenue Growth: CMS Energy displayed positive results in 3 months. As of 30 June, 2024, the company achieved a solid revenue growth rate of approximately 3.34%. This indicates a notable increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Utilities sector.

Insights into Profitability:

• Gross Margin: The company faces challenges with a low gross margin of 40.95%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): CMS Energy's EPS is below the industry average. The company faced challenges with a current EPS of 0.65. This suggests a potential decline in earnings.

Debt Management: With a high debt-to-equity ratio of 2.03, CMS Energy faces challenges in effectively managing its debt levels, indicating potential financial strain.

Market Valuation:

• Price to Earnings (P/E) Ratio: A higher-than-average P/E ratio of 20.36 suggests caution, as the stock may be overvalued in the eyes of investors.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 2.64 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): With a lower-than-industry-average EV/EBITDA ratio of 11.93, CMS Energy presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

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Why Pay Attention to Insider Transactions

Insider transactions, although significant, should be considered within the larger context of market analysis and trends.

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.

Important Transaction Codes

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes 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 CMS Energy's Insider Trades.

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