Terry B McKertcher, Vice President at Powell Industries POWL, reported an insider buy on October 2, according to a new SEC filing.

What Happened: McKertcher made a significant move by purchasing 500 shares of Powell Industries as reported in a Form 4 filing with the U.S. Securities and Exchange Commission. The transaction’s total worth stands at $91,070.

The latest market snapshot at Thursday morning reveals Powell Industries shares up by 2.69%, trading at $237.84.

Unveiling the Story Behind Powell Industries

Powell Industries Inc is a United States-based company that develops, designs, manufactures, and services custom-engineered equipment and systems for electrical energy distribution, control, and monitoring. The company’s principal products comprise integrated power control room substations, custom-engineered modules, electrical houses, traditional and arc-resistant distribution switchgear and control gear, and so on. These products are applied in oil and gas refining, offshore oil and gas production, petrochemical, pipeline, terminal, mining and metals, light-rail traction power, electric utility, pulp and paper, and other heavy industrial markets. The company generates the majority of its sales from the United States.

Powell Industries: Delving into Financials

Revenue Growth: Powell Industries displayed positive results in 3 months. As of 30 June, 2024, the company achieved a solid revenue growth rate of approximately 49.8%. This indicates a notable increase in the company’s top-line earnings. When compared to others in the Industrials sector, the company excelled with a growth rate higher than the average among peers.

Navigating Financial Profits:

• Gross Margin: The company shows a low gross margin of 28.37%, suggesting potential challenges in cost control and profitability compared to its peers.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 3.85, Powell Industries showcases strong earnings per share.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.0.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 21.64 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The current P/S ratio of 2.98 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio 15.05 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization Analysis: Below industry benchmarks, the company’s market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

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Unmasking the Significance of Insider Transactions

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

In the realm of legality, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Cracking Transaction Codes

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 Powell Industries’s Insider Trades.

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