It was reported on November 20, that Paul Uhlman, Vice President at Federated Hermes FHI executed a significant insider sell, according to an SEC filing.

What Happened: Uhlman opted to sell 6,311 shares of Federated Hermes, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The transaction’s total worth stands at $261,200.

As of Thursday morning, Federated Hermes shares are down by 0.0%, currently priced at $41.42.

All You Need to Know About Federated Hermes

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%).

Understanding the Numbers: Federated Hermes’s Finances

Revenue Growth: Federated Hermes displayed positive results in 3 months. As of 30 September, 2024, the company achieved a solid revenue growth rate of approximately 1.44%. This indicates a notable increase in the company’s top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Financials sector.

Key Insights into Profitability Metrics:

• 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): Federated Hermes’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 1.06.

Debt Management: With a below-average debt-to-equity ratio of 0.41, Federated Hermes adopts a prudent financial strategy, indicating a balanced approach to debt management.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 13.11 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 2.08, 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): Federated Hermes’s EV/EBITDA ratio at 7.75 suggests potential undervaluation, falling below industry averages.

Market Capitalization Perspectives: The company’s market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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Understanding the Significance of Insider Transactions

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

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.

A Closer Look at Important Transaction Codes

Examining transactions, investors often concentrate on those unfolding 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 Federated Hermes’s Insider Trades.

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