Disclosed on November 20, Randall C Stuewe, Chairman and CEO at Darling Ingredients (NYSE:DAR), executed a substantial insider sell as per the latest SEC filing.
What Happened: Stuewe's decision to sell 25,000 shares of Darling Ingredients was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the sale is $1,049,054.
Darling Ingredients shares are trading down 4.0% at $40.11 at the time of this writing on Thursday morning.
About Darling Ingredients
Darling Ingredients Inc develops and manufactures sustainable ingredients for customers in the pharmaceutical, food, pet food, fuel, and fertilizer industries. It collects and transforms all aspects of animal by-product streams into ingredients, including gelatin, fats, proteins, pet food ingredients, fertilizers. Also, the company recovers and converts used cooking oil and bakery remnants into feed and fuel ingredients. Darling has three primary business segments which are feed ingredients contributing the majority of revenue, food ingredients, and fuel ingredients. It provides grease trap services for food businesses and sells various equipment for collecting and delivering cooking oil. The company derives the majority of its revenue from customers in North America.
Darling Ingredients: Delving into Financials
Revenue Challenges: Darling Ingredients's revenue growth over 3 months faced difficulties. As of 30 September, 2024, the company experienced a decline of approximately -12.51%. This indicates a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Staples sector.
Profitability Metrics:
Gross Margin: The company maintains a high gross margin of 22.05%, indicating strong cost management and profitability compared to its peers.
Earnings per Share (EPS): Darling Ingredients's EPS is below the industry average. The company faced challenges with a current EPS of 0.11. This suggests a potential decline in earnings.
Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 0.98, caution is advised due to increased financial risk.
Analyzing Market Valuation:
Price to Earnings (P/E) Ratio: The current P/E ratio of 25.79 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.
Price to Sales (P/S) Ratio: The P/S ratio of 1.14 is lower than the industry average, implying a discounted valuation for Darling Ingredients's stock in relation to sales performance.
EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 10.52, Darling Ingredients could be considered undervalued.
Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.
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Why Insider Transactions Are Important
While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.
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.
Exploring Key Transaction Codes
Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely 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 signals 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 Darling Ingredients's Insider Trades.
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