It was reported on October 28, that Robert G Brown, 10% Owner at SPAR Group SGRP executed a significant insider sell, according to an SEC filing.

What Happened: Brown opted to sell 22,574 shares of SPAR Group, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The transaction’s total worth stands at $55,332.

The latest update on Tuesday morning shows SPAR Group shares down by 0.41%, trading at $2.43.

Delving into SPAR Group’s Background

SPAR Group Inc is a supplier of merchandising and other marketing services. It also provides range of services to retailers, consumer goods manufacturers and distributors around the globe. The company divides its operations into three reportable regional segments: Americas, which is comprised of United States, Canada, Brazil and Mexico; Asia-Pacific (APAC), which is comprised of Japan, China, and India; and Europe, Middle East and Africa (EMEA), which is comprised of South Africa. It generates maximum revenue from Americas.

Key Indicators: SPAR Group’s Financial Health

Revenue Growth: SPAR Group’s revenue growth over a period of 3 months has faced challenges. As of 30 June, 2024, the company experienced a revenue decline of approximately -13.11%. This indicates a decrease 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 Communication Services sector.

Insights into Profitability:

• Gross Margin: The company shows a low gross margin of 19.19%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): SPAR Group’s EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 0.15.

Debt Management: SPAR Group’s debt-to-equity ratio is notably higher than the industry average. With a ratio of 0.73, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 4.6 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.23 is lower than the industry average, implying a discounted valuation for SPAR Group’s stock in relation to 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 2.54, SPAR Group could be considered undervalued.

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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Illuminating the Importance of Insider Transactions

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

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.

A Closer Look at Important Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously 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 indicates 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 SPAR Group’s Insider Trades.

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