A significant insider transaction involving the exercise of company stock options was reported on November 12, by Surya N Mohapatra, Board Member at Leidos Holdings LDOS, as per the latest SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Tuesday showed that Mohapatra, Board Member at Leidos Holdings, a company in the Industrials sector, just exercised stock options worth 4,070 shares of LDOS stock with an exercise price of $63.08.

As of Tuesday morning, Leidos Holdings shares are up by 0.37%, with a current price of $202.14. This implies that Mohapatra’s 4,070 shares have a value of $565,954.

About Leidos Holdings

Leidos Holdings Inc is a technology, engineering, and science company that provides services and solutions in the defense, intelligence, civil, and health markets, both domestically and internationally. Company customer includes the U.S. Department of Defense (“DoD”), the U.S. Intelligence Community, the U.S. Department of Homeland Security (“DHS”), the Federal Aviation Administration (“FAA”), the Department of Veterans Affairs (“VA”), and many other U.S. civilian, state and local government agencies, etc. The company is engaged in three reportable segments; Defense Solutions, Civil, and Health. Defense Solutions provides technologically latest services, solutions, and products to a broad customer base. It generates key revenue from Defense Solutions.

Understanding the Numbers: Leidos Holdings’s Finances

Revenue Growth: Leidos Holdings displayed positive results in 3 months. As of 30 September, 2024, the company achieved a solid revenue growth rate of approximately 6.86%. This indicates a notable increase in the company’s top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Industrials sector.

Key Profitability Indicators:

• Gross Margin: The company shows a low gross margin of 18.19%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Leidos Holdings’s EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 2.72.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 1.11.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 22.91 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 1.7, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 14.94, Leidos Holdings presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.

Market Capitalization: Exceeding industry standards, the company’s market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

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Why Insider Transactions Are Important

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

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.

Understanding Crucial Transaction Codes

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely 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 Leidos Holdings’s Insider Trades.

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