Susan Kreh, Chief Financial Officer at Oil-Dri Corp of America ODC, reported an insider buy on October 21, according to a new SEC filing.

What Happened: Kreh’s recent purchase of 3,500 shares of Oil-Dri Corp of America, disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday, reflects confidence in the company’s potential. The total transaction value is $239,505.

As of Tuesday morning, Oil-Dri Corp of America shares are down by 1.27%, currently priced at $67.56.

Unveiling the Story Behind Oil-Dri Corp of America

Oil-Dri Corp of America develops, manufactures, and markets sorbent products made predominantly from clay. Its absorbent offerings, which draw liquid up, include cat litter, floor products, toxin control substances for livestock, and agricultural chemical carriers. The company has two segments based on the different characteristics of two primary customer groups namely Retail and Wholesale Products Group and Business to Business Products Group. The company’s products are sold under various brands such as Cat’s Pride, Jonny Cat, Amlan, Agsorb, Verge, Pure-Flo, and Ultra-Clear.

Oil-Dri Corp of America’s Financial Performance

Revenue Growth: Oil-Dri Corp of America’s revenue growth over a period of 3 months has been noteworthy. As of 31 July, 2024, the company achieved a revenue growth rate of approximately 5.88%. This indicates a substantial increase in the company’s top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Consumer Staples sector.

Insights into Profitability:

• Gross Margin: The company shows a low gross margin of 29.04%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 1.26, Oil-Dri Corp of America 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 0.34.

Market Valuation:

• Price to Earnings (P/E) Ratio: Oil-Dri Corp of America’s P/E ratio of 12.6 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 1.38, 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): With an EV/EBITDA ratio lower than industry averages at 7.72, Oil-Dri Corp of America could be considered undervalued.

Market Capitalization: Indicating a reduced size compared to industry averages, the company’s market capitalization poses unique challenges.

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Exploring the Significance of Insider Trading

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

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.

Cracking Transaction Codes

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Oil-Dri Corp of America’s Insider Trades.

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