Making a noteworthy insider sell on November 27, Anthony Grande, EVP at CoreCivic (NYSE:CXW), is reported in the latest SEC filing.
What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday, Grande sold 26,000 shares of CoreCivic. The total transaction value is $576,680.
CoreCivic shares are trading up 2.69% at $22.53 at the time of this writing on Thursday morning.
Discovering CoreCivic: A Closer Look
CoreCivic Inc is an owner and operator of private prisons and detention centers in the United States. It operates in three segments: Safety, Community, and Properties. The Community segment owns and operates residential reentry centers. The Properties segment owns properties for lease to third parties and government agencies. The vast majority of the company's revenue comes from the CoreCivic Safety segment which consists of correctional and detention facilities that are owned, or controlled via a long-term lease, and managed by the company, as well as those correctional and detention facilities owned by third parties but managed by CoreCivic.
CoreCivic's Economic Impact: An Analysis
Revenue Growth: CoreCivic's revenue growth over a period of 3 months has been noteworthy. As of 30 September, 2024, the company achieved a revenue growth rate of approximately 1.62%. This indicates a substantial increase 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 Industrials sector.
Analyzing Profitability Metrics:
Gross Margin: The company issues a cost efficiency warning with a low gross margin of 24.56%, indicating potential difficulties in maintaining profitability compared to its peers.
Earnings per Share (EPS): CoreCivic's EPS is below the industry average. The company faced challenges with a current EPS of 0.19. This suggests a potential decline in earnings.
Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.67.
Financial Valuation Breakdown:
Price to Earnings (P/E) Ratio: CoreCivic's P/E ratio of 32.26 is below the industry average, suggesting the stock may be undervalued.
Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 1.25, 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): With a lower-than-industry-average EV/EBITDA ratio of 10.97, CoreCivic presents a potential value opportunity, as investors are paying less for each unit of EBITDA.
Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.
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The Importance of Insider Transactions
Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.
In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.
When a company insider makes a new purchase, that is an indication that they expect the stock to rise.
Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.
Navigating the World of Insider Transaction Codes
When analyzing transactions, investors tend to focus on those in the open market, 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 CoreCivic's Insider Trades.
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