It was reported on November 12, that Joel R Rathbun, SVP at Avient AVNT executed a significant insider sell, according to an SEC filing.

What Happened: Rathbun’s decision to sell 27,250 shares of Avient was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total value of the sale is $1,401,935.

Avient shares are trading down 0.32% at $51.95 at the time of this writing on Tuesday morning.

Get to Know Avient Better

Avient Corp manufactures and sells a variety of chemical and plastic-based products to designers and processors of plastics. The firm operates in two segments: Color, Additives and Inks, and Specialty Engineered Materials. The company’s product portfolio includes concentrated color and ink blends, plastic resins, and various specialized polymer materials used in industries such as food packaging, construction, transportation, cosmetics, and healthcare. The color, additives, & ink segment and the distribution segment together generate a vast majority of revenue. More than half of the total revenue is derived from the United States.

Key Indicators: Avient’s Financial Health

Revenue Growth: Avient’s revenue growth over a period of 3 months has been noteworthy. As of 30 September, 2024, the company achieved a revenue growth rate of approximately 8.16%. This indicates a substantial increase in the company’s top-line earnings. When compared to others in the Materials sector, the company excelled with a growth rate higher than the average among peers.

Profitability Metrics: Unlocking Value

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 32.07%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Avient’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.42.

Debt Management: Avient’s debt-to-equity ratio stands notably higher than the industry average, reaching 0.88. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Navigating Market Valuation:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 31.97 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 1.49, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio of 13.52 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

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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Understanding the Significance of Insider Transactions

Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it’s crucial to evaluate them in conjunction with other investment factors.

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

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Unlocking the Meaning of Transaction Codes

When dissecting transactions, the focal point for investors is often those occurring 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 Avient’s Insider Trades.

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