Eric Scroggins, VP at Allison Transmission ALSN, disclosed an insider sell on November 7, according to a recent SEC filing.

What Happened: Scroggins’s decision to sell 2,762 shares of Allison Transmission was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The total value of the sale is $302,812.

Tracking the Friday’s morning session, Allison Transmission shares are trading at $118.02, showing a down of 0.0%.

Get to Know Allison Transmission Better

Allison Transmission is the largest manufacturer of fully automatic transmissions for commercial vehicles. The company’s automatic transmissions allow customers to achieve better fuel and operator efficiency than less expensive manual and automated manual transmissions. Allison serves several end markets, including on- and off-highway equipment and military vehicles. Its on-highway business has about 60% global market share. The company’s transmissions can be found in Class 4-8 trucks, buses, and a limited number of large passenger vehicles (heavy-duty pickup trucks and motor homes). Allison also produces electric hybrid propulsion systems and is developing e-powertrains.

A Deep Dive into Allison Transmission’s Financials

Revenue Growth: Over the 3 months period, Allison Transmission showcased positive performance, achieving a revenue growth rate of 11.96% as of 30 September, 2024. This reflects a substantial 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.

Analyzing Profitability Metrics:

• Gross Margin: The company maintains a high gross margin of 48.06%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Allison Transmission’s EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 2.3.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 1.48, caution is advised due to increased financial risk.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 14.41 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 3.27 is above industry norms, reflecting an elevated valuation for Allison Transmission’s stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an impressive EV/EBITDA ratio of 10.62, Allison Transmission demonstrates exemplary market valuation, surpassing industry averages.

Market Capitalization Analysis: Falling below industry benchmarks, the company’s market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Why Insider Transactions Are Key in Investment Decisions

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

In legal terms, an “insider” refers to any officer, director, or beneficial owner of more than ten percent of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Important Transaction Codes

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely 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 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 Allison Transmission’s Insider Trades.

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