Michael C Smiley, Director at Twin Disc TWIN, reported an insider buy on November 4, according to a new SEC filing.

What Happened: In a recent Form 4 filing with the U.S. Securities and Exchange Commission on Monday, Smiley increased their investment in Twin Disc by purchasing 6,747 shares through open-market transactions, signaling confidence in the company’s potential. The total transaction value is $79,999.

At Tuesday morning, Twin Disc shares are up by 0.43%, trading at $11.73.

Delving into Twin Disc’s Background

Twin Disc Inc is a United States-based firm engaged in the manufacture and sale of marine and heavy-duty off-highway power transmission equipment. The company operates its business through two reportable segments: Manufacturing and Distribution. Its product portfolio includes marine transmissions, surface drives, propellers, and boat management systems as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and control systems.

Financial Insights: Twin Disc

Revenue Growth: Twin Disc displayed positive results in 3 months. As of 30 June, 2024, the company achieved a solid revenue growth rate of approximately 0.59%. This indicates a notable increase in the company’s top-line earnings. When compared to others in the Industrials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Key Profitability Indicators:

• Gross Margin: The company maintains a high gross margin of 29.72%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Twin Disc’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.54.

Debt Management: Twin Disc’s debt-to-equity ratio is below the industry average. With a ratio of 0.26, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Insights into Valuation Metrics:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 14.81, Twin Disc’s stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.55 is lower than the industry average, implying a discounted valuation for Twin Disc’s stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Twin Disc’s EV/EBITDA ratio at 6.91 suggests potential undervaluation, falling below industry averages.

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

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

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

Highlighted by a company insider’s new purchase, there’s a positive anticipation for the stock to rise.

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

Deciphering Transaction Codes in Insider Filings

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 Twin Disc’s Insider Trades.

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