Disclosed on October 30, Rodney Clemente, SVP at Energy Recovery ERII, executed a substantial insider sell as per the latest SEC filing.

What Happened: After conducting a thorough analysis, Clemente sold 6,505 shares of Energy Recovery. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total transaction value is $116,946.

Monitoring the market, Energy Recovery‘s shares down by 0.0% at $17.58 during Thursday’s morning.

Delving into Energy Recovery’s Background

Energy Recovery Inc is an engineering-driven technology company. It is engaged in engineering, designing, manufacturing and supplying solutions that make industrial processes more efficient and sustainable. The company operates in three segments, Water, Emerging Technologies and Corporate. It offers energy recovery devices (ERDs) and pumps as well as related products and services to the global reverse osmosis desalination market. The company derives a majority of the revenue from the Water segment. Geographically, the company operates in the U.S. and other international countries.

Energy Recovery: A Financial Overview

Positive Revenue Trend: Examining Energy Recovery’s financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 31.25% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Industrials sector.

Exploring Profitability:

• Gross Margin: The company sets a benchmark with a high gross margin of 64.58%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Energy Recovery’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of -0.01.

Debt Management: Energy Recovery’s debt-to-equity ratio is below the industry average. With a ratio of 0.06, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 50.97, Energy Recovery’s stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 7.78 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 41.59 positions the company as being more valued compared to industry benchmarks.

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

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

Navigating the Impact of Insider Transactions on Investments

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

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.

Breaking Down the Significance of Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously outlined in Table I of the Form 4 filing. A P in Box 3 indicates 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 Energy Recovery’s Insider Trades.

Insider Buying Alert: Profit from C-Suite Moves

Benzinga Edge reveals every insider trade in real-time. Don’t miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. Click here for access.

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