On November 20, a recent SEC filing unveiled that Anwar Saker Nusseibeh, CEO at Federated Hermes FHI made an insider sell.

What Happened: After conducting a thorough analysis, Nusseibeh sold 4,454 shares of Federated Hermes. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total transaction value is $184,300.

In the Thursday’s morning session, Federated Hermes‘s shares are currently trading at $41.42, experiencing a down of 0.0%.

Discovering Federated Hermes: A Closer Look

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%).

Federated Hermes: Financial Performance Dissected

Revenue Growth: Federated Hermes’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 1.44%. This indicates a substantial increase in the company’s top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Financials sector.

Profitability Metrics: Unlocking Value

• Gross Margin: With a high gross margin of 66.7%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): Federated Hermes’s EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 1.06.

Debt Management: Federated Hermes’s debt-to-equity ratio is below the industry average at 0.41, reflecting a lower dependency on debt financing and a more conservative financial approach.

Evaluating 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): At 7.75, Federated Hermes’s EV/EBITDA ratio reflects a below-par valuation compared to industry averages signalling undervaluation

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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The Impact of Insider Transactions on Investments

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

In the context of legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

Pointing towards optimism, a company insider’s new purchase signals their positive anticipation for the stock to rise.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

Essential Transaction Codes Unveiled

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 Federated Hermes’s Insider Trades.

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