Varex Imaging Chief Financial Officer Makes $108K Stock Purchase

In a recent SEC filing, it was revealed that Shubham Maheshwari, Chief Financial Officer at Varex Imaging VREX, made a noteworthy insider purchase on August 14,.

What Happened: Maheshwari's recent purchase of 10,000 shares of Varex Imaging, disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday, reflects confidence in the company's potential. The total transaction value is $108,200.

Varex Imaging's shares are actively trading at $12.18, experiencing a up of 5.0% during Thursday's morning session.

Get to Know Varex Imaging Better

Varex Imaging Corp designs and manufactures X-ray imaging components. It operates in two segments Medical and Industrial. The Medical segment, which is the key revenue driver, designs, manufactures, sells, and services X-ray imaging components comprising X-ray tubes, digital flat panel image detectors, high voltage connectors, ionization chambers, and buckys among others. The Industrial segment designs, manufactures, sells, and services Linatron X-ray accelerators, X-ray tubes, digital flat panel detectors and high voltage connectors among others. It has manufacturing, research, and development operation in the United States, Europe, Philippines and China, and sales and service operations throughout the world.

Unraveling the Financial Story of Varex Imaging

Decline in Revenue: Over the 3 months period, Varex Imaging faced challenges, resulting in a decline of approximately -9.95% in revenue growth as of 30 June, 2024. This signifies a reduction in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Health Care sector.

Holistic Profitability Examination:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 31.99%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Varex Imaging's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.03.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.81.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The P/E ratio of 15.68 is lower than the industry average, implying a discounted valuation for Varex Imaging's stock.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.71, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Varex Imaging's EV/EBITDA ratio, lower than industry averages at 11.92, indicates attractively priced shares.

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

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Why Pay Attention to Insider Transactions

Emphasizing the importance of a comprehensive approach, 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.

Deciphering Transaction Codes in Insider Filings

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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 Varex Imaging's Insider Trades.

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