Sell Alert: Deming Xiao Cashes Out $9.50M In Monolithic Power Systems Stock

Deming Xiao, EVP at Monolithic Power Systems MPWR, disclosed an insider sell on August 22, according to a recent SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Xiao sold 10,000 shares of Monolithic Power Systems. The total transaction amounted to $9,500,000.

As of Friday morning, Monolithic Power Systems shares are up by 2.42%, currently priced at $930.51.

All You Need to Know About Monolithic Power Systems

Monolithic Power Systems is an analog and mixed-signal chipmaker, specializing in power management solutions. The firm's mission is to reduce total energy consumption in end systems, and it serves the computing, automotive, industrial, communications, and consumer end markets. MPS uses a fabless manufacturing model, partnering with third-party chip foundries to host its proprietary BCD process technology.

Monolithic Power Systems's Financial Performance

Revenue Growth: Monolithic Power Systems's revenue growth over a period of 3 months has been noteworthy. As of 30 June, 2024, the company achieved a revenue growth rate of approximately 15.03%. This indicates a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Information Technology sector.

Key Profitability Indicators:

• Gross Margin: Achieving a high gross margin of 55.29%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): With an EPS below industry norms, Monolithic Power Systems exhibits below-average bottom-line performance with a current EPS of 2.06.

Debt Management: Monolithic Power Systems's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.01.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: Monolithic Power Systems's current Price to Earnings (P/E) ratio of 108.16 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 23.45, Monolithic Power Systems'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): A high EV/EBITDA ratio of 86.98 reflects market recognition of Monolithic Power Systems's value, positioning it as more highly valued compared to industry peers.

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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Delving Into the Significance of Insider Transactions

Insider transactions serve as a piece of the puzzle in investment decisions, rather than the entire picture.

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

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 Monolithic Power Systems's Insider Trades.

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