It was reported on November 27, that Matteo Arduini, President Hydraulics at Helios Technologies HLIO executed a significant insider sell, according to an SEC filing.

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday, Arduini sold 4,000 shares of Helios Technologies. The total transaction value is $215,920.

Helios Technologies‘s shares are actively trading at $52.12, experiencing a down of 2.14% during Thursday’s morning session.

Discovering Helios Technologies: A Closer Look

Helios Technologies Inc is a industrial technology company that develops, manufactures, and markets solutions for the hydraulics and electronics markets. It operates under two business segments: Hydraulics and Electronics. The Hydraulics segment designs and manufactures hydraulic cartridge valves, hydraulic quick release couplings as well as engineers complete hydraulic systems. The Electronics segment designs and manufactures customized electronic controls systems and displays for a variety of end markets including industrial and mobile, recreational and health and wellness.

Helios Technologies: Delving into Financials

Negative Revenue Trend: Examining Helios Technologies’s financials over 3 months reveals challenges. As of 30 September, 2024, the company experienced a decline of approximately -3.43% in revenue growth, reflecting a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Holistic Profitability Examination:

• Gross Margin: The company faces challenges with a low gross margin of 31.11%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Helios Technologies’s EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.34.

Debt Management: Helios Technologies’s debt-to-equity ratio stands notably higher than the industry average, reaching 0.54. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The P/E ratio of 47.13 is lower than the industry average, implying a discounted valuation for Helios Technologies’s stock.

• Price to Sales (P/S) Ratio: With a P/S ratio of 2.16 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 15.15, Helios Technologies presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: The company’s market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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Why Insider Transactions Are Key in Investment Decisions

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

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.

Transaction Codes To Focus On

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Helios Technologies’s Insider Trades.

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