Options Exercise: DOUGLAS COLTHARP At Encompass Health Realizes $627K

DOUGLAS COLTHARP, EVP & Chief Financial Officer at Encompass Health EHC, reported a large exercise of company stock options on August 14, according to a new SEC filing.

What Happened: COLTHARP, EVP & Chief Financial Officer at Encompass Health, exercised stock options for 12,260 shares of EHC stock. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The exercise price of the options was $35.83 per share.

The Thursday morning market activity shows Encompass Health shares down by 0.0%, trading at $86.98. This implies a total value of $627,099 for COLTHARP's 12,260 shares.

Unveiling the Story Behind Encompass Health

Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals. Inpatient rehabilitation contributes the majority of the firm's revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. These hospitals are concentrated in the eastern half of the United States and Texas.

Financial Insights: Encompass Health

Revenue Growth: Over the 3 months period, Encompass Health showcased positive performance, achieving a revenue growth rate of 9.61% as of 30 June, 2024. This reflects a substantial increase in the company's top-line earnings. When compared to others in the Health Care sector, the company excelled with a growth rate higher than the average among peers.

Profitability Metrics: Unlocking Value

• Gross Margin: The company excels with a remarkable gross margin of 95.57%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Encompass Health's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 1.13.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 1.6.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 21.53, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.75, Encompass Health's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio of 10.54 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

Unmasking the Significance of Insider Transactions

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Cracking Transaction Codes

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Encompass Health's Insider Trades.

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