On October 3, a substantial insider purchase was made by Wesley R Edens, Chief Executive Officer at New Fortress Energy NFE, as per the latest SEC filing.

What Happened: In a significant move reported in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday, Edens purchased 5,793,742 shares of New Fortress Energy, demonstrating confidence in the company’s growth potential. The total value of the transaction stands at $49,999,993.

New Fortress Energy‘s shares are actively trading at $9.38, experiencing a up of 3.93% during Friday’s morning session.

Get to Know New Fortress Energy Better

New Fortress Energy is an integrated gas-to-power company. Its business model spans the entire production and delivery chain from natural gas procurement and liquefaction to logistics, shipping, terminals, and conversion or development of a natural gas-fired generation. It has invested in floating, liquefied natural gas vessels to both lower the cost of acquiring gas while securing a long-term supply for its terminals. Its segments include terminals and infrastructure, or T&I, and ships.

A Deep Dive into New Fortress Energy’s Financials

Negative Revenue Trend: Examining New Fortress Energy’s financials over 3 months reveals challenges. As of 30 June, 2024, the company experienced a decline of approximately -23.75% in revenue growth, reflecting a decrease in 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 Energy sector.

Holistic Profitability Examination:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 37.0%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, New Fortress Energy exhibits below-average bottom-line performance with a current EPS of -0.44.

Debt Management: New Fortress Energy’s debt-to-equity ratio is notably higher than the industry average. With a ratio of 5.3, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Market Valuation:

• Price to Earnings (P/E) Ratio: New Fortress Energy’s P/E ratio of 7.63 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.77, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): New Fortress Energy’s EV/EBITDA ratio, surpassing industry averages at 12.86, positions it with an above-average valuation in the market.

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

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Unmasking the Significance of Insider Transactions

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.

From a legal standpoint, the term “insider” pertains to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider’s new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect 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 New Fortress Energy’s Insider Trades.

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