Disclosed on November 6, Prakash Bedapudi, EVP at Lennox Intl LII, executed a substantial insider sell as per the latest SEC filing.

What Happened: Bedapudi opted to sell 3,142 shares of Lennox Intl, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The transaction’s total worth stands at $1,940,732.

As of Thursday morning, Lennox Intl shares are down by 0.0%, currently priced at $604.78.

Unveiling the Story Behind Lennox Intl

Lennox International manufactures and distributes heating, ventilating, air conditioning, and refrigeration products to replacement (75% of sales) and new construction (25% of sales) markets. In fiscal 2023, residential HVAC was 68% of sales and commercial HVAC and Heatcraft refrigeration was 32% of sales. The company goes to market with multiple brands, but Lennox is the company’s flagship HVAC brand. The Texas-based company is focused on North America after the sale of its European HVAC and refrigeration businesses in late 2023.

Lennox Intl’s Economic Impact: An Analysis

Revenue Growth: Lennox Intl displayed positive results in 3 months. As of 30 September, 2024, the company achieved a solid revenue growth rate of approximately 9.65%. This indicates a notable increase in the company’s top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Industrials sector.

Insights into Profitability:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 32.6%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 6.71, Lennox Intl showcases strong earnings per share.

Debt Management: Lennox Intl’s debt-to-equity ratio is notably higher than the industry average. With a ratio of 1.89, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: Lennox Intl’s P/E ratio of 28.73 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 4.21, Lennox Intl’s stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio of 21.21, the company’s market valuation exceeds industry averages.

Market Capitalization: Surpassing industry standards, the company’s market capitalization asserts its dominance in terms of size, suggesting a robust market position.

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Why Insider Transactions Are Key in Investment Decisions

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor’s decision-making process.

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.

Transaction Codes To Focus On

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes 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 Lennox Intl’s Insider Trades.

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