A significant insider buy by Andrew Siegel, Director at Daktronics DAKT, was executed on September 11, and reported in the recent SEC filing.

What Happened: Siegel demonstrated confidence in Daktronics by purchasing 7,160 shares, as reported in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the transaction is $84,989.

At Thursday morning, Daktronics shares are down by 0.0%, trading at $12.19.

Unveiling the Story Behind Daktronics

Daktronics Inc designs and manufactures electronic scoreboards, programmable display systems, and large-screen video displays for sporting, commercial, and transportation applications. It is engaged in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support. The company offers a complete line of products, from small scoreboards and electronic displays to large multimillion-dollar video display systems as well as related control, timing, and sound systems. The company has five reportable segments: Commercial, Live Events, High School Park and Recreation, Transportation, and International. The company makes the majority of its revenue from Live events.

Daktronics’s Economic Impact: An Analysis

Revenue Growth: Daktronics’s revenue growth over a period of 3 months has faced challenges. As of 31 July, 2024, the company experienced a revenue decline of approximately -2.77%. This indicates a decrease in the company’s 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 Information Technology sector.

Insights into Profitability:

• Gross Margin: The company shows a low gross margin of 26.4%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Daktronics’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of -0.11.

Debt Management: Daktronics’s debt-to-equity ratio is below the industry average. With a ratio of 0.32, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: Daktronics’s stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 58.05.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.7 is lower than the industry average, implying a discounted valuation for Daktronics’s stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 6.15, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

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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Navigating the Impact of Insider Transactions on Investments

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

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.

Deciphering Transaction Codes in Insider Filings

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.

Check Out The Full List Of Daktronics’s Insider Trades.

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