Insider Transaction: Arve Hanstveit Sells $337K Worth Of Energy Recovery Shares

Revealing a significant insider sell on December 17, Arve Hanstveit, Director at Energy Recovery ERII, as per the latest SEC filing.

What Happened: Hanstveit's decision to sell 20,000 shares of Energy Recovery was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total value of the sale is $337,400.

During Wednesday's morning session, Energy Recovery shares up by 0.62%, currently priced at $16.19.

Unveiling the Story Behind Energy Recovery

Energy Recovery Inc is an engineering-driven technology company. It is engaged in engineering, designing, manufacturing and supplying solutions that make industrial processes more efficient and sustainable. The company operates in three segments, Water, Emerging Technologies and Corporate. It offers energy recovery devices (ERDs) and pumps as well as related products and services to the global reverse osmosis desalination market. The company derives a majority of the revenue from the Water segment. Geographically, the company operates in the U.S. and other international countries.

Energy Recovery: A Financial Overview

Positive Revenue Trend: Examining Energy Recovery's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 4.18% as of 30 September, 2024, showcasing a substantial increase in top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Industrials sector.

Key Profitability Indicators:

• Gross Margin: The company maintains a high gross margin of 65.08%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, Energy Recovery exhibits below-average bottom-line performance with a current EPS of 0.15.

Debt Management: Energy Recovery's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.05.

Market Valuation:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 48.76, Energy Recovery's stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 6.85 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 40.15 reflects market recognition of Energy Recovery's value, positioning it as more highly valued compared to industry peers.

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

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Why Insider Activity Matters in Finance

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

When discussing 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 stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Transaction Codes Worth Your Attention

Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as outlined in Table I of the Form 4 filing. A P in Box 3 indicates 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 Energy Recovery's Insider Trades.

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