Peter Germain, EVP at Federated Hermes FHI, disclosed an insider sell on November 20, according to a recent SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday outlined that Germain executed a sale of 4,922 shares of Federated Hermes with a total value of $203,580.

In the Thursday’s morning session, Federated Hermes‘s shares are currently trading at $41.26, experiencing a down of 0.38%.

Delving into Federated Hermes’s Background

Federated Hermes provides asset-management services for institutional and individual investors. The firm had $782.7 billion in managed assets at the end of June 2024, composed of equity (10%), multi-asset (less than 1%), fixed-income (12%), alternative (3%), and money market (75%) funds. The firm’s cash-management operations are expected to generate around 50% of Federated’s revenue this year, compared with 28%, 12%, and 10%, respectively, for the equity, fixed-income, and alternatives/multi-asset operations. The company’s products are distributed via trust banks, wealth managers, and retail broker/dealers (64% of AUM), institutional investors (27%), and international clients (9%).

Financial Insights: Federated Hermes

Positive Revenue Trend: Examining Federated Hermes’s financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 1.44% as of 30 September, 2024, showcasing a substantial increase in 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 Financials sector.

Profitability Metrics: Unlocking Value

• Gross Margin: The company excels with a remarkable gross margin of 66.7%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): With an EPS below industry norms, Federated Hermes exhibits below-average bottom-line performance with a current EPS of 1.06.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.41.

Market Valuation:

• Price to Earnings (P/E) Ratio: Federated Hermes’s P/E ratio of 13.11 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The current P/S ratio of 2.08 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Federated Hermes’s EV/EBITDA ratio at 7.75 suggests potential undervaluation, falling below 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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The Importance 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.

From a legal standpoint, the term “insider” pertains to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider’s new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Transaction Codes Worth Your Attention

When analyzing transactions, investors tend to focus on those in the open market, 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 Federated Hermes’s Insider Trades.

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