Nando Cesarone, President at United Parcel Service UPS, executed a substantial insider sell on November 27, according to an SEC filing.

What Happened: Cesarone’s decision to sell 10,000 shares of United Parcel Service was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the sale is $1,371,022.

As of Thursday morning, United Parcel Service shares are up by 0.51%, currently priced at $135.65.

Unveiling the Story Behind United Parcel Service

As the world’s largest parcel delivery company, UPS manages a massive fleet of more than 500 planes and 100,000 vehicles, along with many hundreds of sorting facilities, to deliver an average of about 22 million packages per day to residences and businesses across the globe. UPS’ domestic US package operations generate around 64% of total revenue while international package makes up 20%. Air and ocean freight forwarding, truckload brokerage, and contract logistics make up the remainder. UPS is currently pursuing “strategic alternatives” for its truck brokerage unit, Coyote, which it acquired in 2015.

United Parcel Service: Financial Performance Dissected

Revenue Growth: Over the 3 months period, United Parcel Service showcased positive performance, achieving a revenue growth rate of 5.62% as of 30 September, 2024. This reflects a substantial 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.

Profitability Metrics: Unlocking Value

• Gross Margin: With a high gross margin of 16.69%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): United Parcel Service’s EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 1.8.

Debt Management: With a high debt-to-equity ratio of 1.56, United Parcel Service faces challenges in effectively managing its debt levels, indicating potential financial strain.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 20.39 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.27 is above industry norms, reflecting an elevated valuation for United Parcel Service’s stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio 11.49 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization Analysis: With a profound presence, the company’s market capitalization is above industry averages. This reflects substantial size and strong market recognition.

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The Impact of Insider Transactions on Investments

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.

A Closer Look at Important Transaction Codes

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 United Parcel Service’s Insider Trades.

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