Sell Alert: Tan Lay Koon Cashes Out $2.16M In Flex Stock

Making a noteworthy insider sell on February 13, Tan Lay Koon, Board Member at Flex FLEX, is reported in the latest SEC filing.

What Happened: After conducting a thorough analysis, Koon sold 50,000 shares of Flex. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The total transaction value is $2,162,500.

Flex's shares are actively trading at $42.85, experiencing a down of 0.37% during Thursday's morning session.

Discovering Flex: A Closer Look

Flex Ltd is a contract manufacturing company providing comprehensive electronics design, manufacturing, and product management services to electronics and technology companies. The company's operating segments include Flex Agility Solutions (FAS) and Flex Reliability Solutions (FRS). Flex Agility Solutions segment includes markets such as Communications, Enterprise and Cloud; Lifestyle; and Consumer Devices. Flex Reliability Solutions segment includes markets such as Automotive, Health Solutions, and Industrial.

Flex's Financial Performance

Revenue Growth: Flex displayed positive results in 3 months. As of 31 December, 2024, the company achieved a solid revenue growth rate of approximately 2.1%. This indicates a notable 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.

Analyzing Profitability Metrics:

• Gross Margin: The company faces challenges with a low gross margin of 9.06%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Flex's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.68.

Debt Management: Flex's debt-to-equity ratio is notably higher than the industry average. With a ratio of 0.83, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Navigating Market Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 17.56 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.68, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 11.26, Flex's EV/EBITDA ratio reflects a below-par valuation compared to industry averages signalling undervaluation

Market Capitalization Analysis: The company's market capitalization surpasses industry averages, showcasing a dominant size relative to peers and suggesting a strong market position.

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Why Insider Transactions Are Important

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

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Understanding Crucial Transaction Codes

When dissecting transactions, the focal point for investors is often those occurring 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 Flex's Insider Trades.

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