On September 17, a recent SEC filing unveiled that Thomas B Smith, EVP and Chief Medical Officer at Collegium Pharmaceutical COLL made an insider sell.

What Happened: Smith’s recent Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday unveiled the sale of 9,593 shares of Collegium Pharmaceutical. The total transaction value is $351,319.

During Wednesday’s morning session, Collegium Pharmaceutical shares up by 2.51%, currently priced at $38.32.

Delving into Collegium Pharmaceutical’s Background

Collegium Pharmaceutical Inc is a specialty pharmaceutical company. The company is engaged in developing and planning to commercialize abuse-deterrent products that incorporate its patented DETERx platform technology for the treatment of chronic pain and other diseases. The DETERx platform technology is designed to maintain the extended-release and safety profiles of highly abused drugs in the face of various methods including chewing, crushing, and dissolving. Its product portfolio includes Xtampza ER, which is an abuse-deterrent, extended-release, oral formulation of oxycodone; and Nucynta Products, which are extended-release and immediate-release formulations of tapentadol; Belbuca, and Symproic.

Key Indicators: Collegium Pharmaceutical’s Financial Health

Revenue Growth: Collegium Pharmaceutical’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 7.18%. 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 Health Care sector.

Interpreting Earnings Metrics:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 62.51%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Collegium Pharmaceutical’s EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 0.6.

Debt Management: Collegium Pharmaceutical’s debt-to-equity ratio is notably higher than the industry average. With a ratio of 2.58, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 14.05 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 2.9, Collegium Pharmaceutical’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): The company’s EV/EBITDA ratio 4.17 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization Analysis: The company’s market capitalization is above the industry average, indicating that it is relatively larger in size compared to peers. This may suggest a higher level of investor confidence and market recognition.

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Uncovering the Importance of Insider Activity

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Breaking Down the Significance of 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 Collegium Pharmaceutical’s Insider Trades.

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