Disclosed in the latest SEC filing, a significant insider purchase on November 4, involves David W Johnson, Board Member at Twin Disc TWIN.

What Happened: Johnson’s recent move, as outlined in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday, involves purchasing 7,090 shares of Twin Disc. The total transaction value is $84,058.

Monitoring the market, Twin Disc‘s shares up by 0.43% at $11.73 during Tuesday’s morning.

Unveiling the Story Behind Twin Disc

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.

Twin Disc: A Financial Overview

Revenue Growth: Twin Disc’s remarkable performance in 3 months is evident. As of 30 June, 2024, the company achieved an impressive revenue growth rate of 0.59%. This signifies a substantial increase in the company’s top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Industrials sector.

Exploring Profitability:

• Gross Margin: The company sets a benchmark with a high gross margin of 29.72%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Twin Disc’s EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.54.

Debt Management: Twin Disc’s debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.26.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 14.81 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• 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): With a lower-than-industry-average EV/EBITDA ratio of 6.91, Twin Disc presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: The company’s market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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Why Insider Transactions Are Key in Investment Decisions

Insider transactions serve as a piece of the puzzle in investment decisions, rather than the entire picture.

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.

Exploring Key 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 Twin Disc’s Insider Trades.

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