Mark Humphrey, SVP & Chief Financial Officer at Herc Hldgs HRI, executed a substantial insider sell on November 5, according to an SEC filing.

What Happened: Humphrey’s decision to sell 2,625 shares of Herc Hldgs was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total value of the sale is $551,488.

The latest market snapshot at Wednesday morning reveals Herc Hldgs shares up by 6.02%, trading at $228.0.

Get to Know Herc Hldgs Better

Herc Holdings is an equipment rental company that was spun out of Hertz Global in 2016. It is currently the third-largest equipment rental company (4% market share) in North America, after United Rentals and Sunbelt Rentals, with a fleet size of $6.4 billion. It serves commercial and residential construction customers, the environmental sector, industrial entities, and entertainment production companies. During much of its 50-year-plus history, the company has rented equipment such as aerial lifts to its customers for intermittent use. More recently, it has broadened its catalog to include a host of specialty items. Separately, Herc Holdings’ strategy now incorporates long-term rentals to industrial customers where Herc maintains its own staff at the customer site.

Breaking Down Herc Hldgs’s Financial Performance

Revenue Growth: Herc Hldgs’s remarkable performance in 3 months is evident. As of 30 September, 2024, the company achieved an impressive revenue growth rate of 6.28%. This signifies a substantial increase in the company’s top-line earnings. When compared to others in the Industrials sector, the company excelled with a growth rate higher than the average among peers.

Key Profitability Indicators:

• Gross Margin: Achieving a high gross margin of 39.9%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Herc Hldgs’s EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 4.3.

Debt Management: Herc Hldgs’s debt-to-equity ratio stands notably higher than the industry average, reaching 3.49. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 17.6 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The P/S ratio of 1.78 is lower than the industry average, implying a discounted valuation for Herc Hldgs’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 7.44, Herc Hldgs presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

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

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Understanding the Significance of Insider Transactions

In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.

Within the legal framework, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities as per 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.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Essential Transaction Codes Unveiled

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 Herc Hldgs’s Insider Trades.

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