Disclosed in a recent SEC filing on October 17, Peterson, Chief Administrative Officer at Zurn Elkay Water ZWS, made a noteworthy transaction involving the exercise of company stock options.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Peterson, Chief Administrative Officer at Zurn Elkay Water, a company in the Industrials sector, just exercised stock options worth 46,780 shares of ZWS stock with an exercise price of $14.22.

As of Friday morning, Zurn Elkay Water shares are down by 0.0%, with a current price of $37.28. This implies that Peterson’s 46,780 shares have a value of $1,078,746.

Delving into Zurn Elkay Water’s Background

Zurn Elkay Water Solutions Corp designs procure, manufactures, and markets a range of clean water solutions for drinking water, hygiene, and sustainable water management. The Zurn Elkay product portfolio includes professional-grade water control and safety, water distribution and drainage, drinking water, finish plumbing, hygienic, environmental and site works products for public and private spaces.

Understanding the Numbers: Zurn Elkay Water’s Finances

Revenue Growth: Over the 3 months period, Zurn Elkay Water showcased positive performance, achieving a revenue growth rate of 2.18% as of 30 June, 2024. This reflects a substantial increase in the company’s top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Insights into Profitability:

• Gross Margin: The company sets a benchmark with a high gross margin of 45.22%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Zurn Elkay Water’s EPS is below the industry average. The company faced challenges with a current EPS of 0.27. This suggests a potential decline in earnings.

Debt Management: Zurn Elkay Water’s debt-to-equity ratio is below the industry average. With a ratio of 0.34, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Valuation Overview:

• Price to Earnings (P/E) Ratio: A higher-than-average P/E ratio of 51.07 suggests caution, as the stock may be overvalued in the eyes of investors.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 4.26, Zurn Elkay Water’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): Zurn Elkay Water’s EV/EBITDA ratio, surpassing industry averages at 22.8, 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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The Importance of Insider Transactions

Insider transactions, although significant, should be considered within the larger context of market analysis and trends.

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

Pointing towards optimism, a company insider’s new purchase signals their positive anticipation for the stock to rise.

Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.

Cracking Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated 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 Zurn Elkay Water’s Insider Trades.

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