Chief Executive Officer Of Latham Group Makes $249K Sale

Disclosed on December 13, Michael Scott Rajeski, Chief Executive Officer at Latham Group SWIM, executed a substantial insider sell as per the latest SEC filing.

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Friday, Rajeski sold 30,000 shares of Latham Group. The total transaction value is $249,783.

Monitoring the market, Latham Group's shares down by 2.46% at $7.53 during Friday's morning.

Unveiling the Story Behind Latham Group

Latham Group Inc is a designer, manufacturer, and marketer of in-ground residential swimming pools, liners, and covers in North America, Australia, and New Zealand. It derives a majority of its revenue from the United States.

Latham Group's Financial Performance

Revenue Challenges: Latham Group's revenue growth over 3 months faced difficulties. As of 30 September, 2024, the company experienced a decline of approximately -6.4%. This indicates a decrease in 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 Consumer Discretionary sector.

Profitability Metrics: Unlocking Value

• Gross Margin: The company faces challenges with a low gross margin of 32.35%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Latham Group's EPS reflects a decline, falling below the industry average with a current EPS of 0.05.

Debt Management: Latham Group's debt-to-equity ratio surpasses industry norms, standing at 0.75. This suggests the company carries a substantial amount of debt, posing potential financial challenges.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 77.2 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.75 is above industry norms, reflecting an elevated valuation for Latham Group's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Latham Group's EV/EBITDA ratio stands at 16.58, surpassing industry benchmarks. This places the company in a position with a higher-than-average market valuation.

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

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Understanding the Significance of Insider Transactions

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.

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.

Unlocking the Meaning of Transaction Codes

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 Latham Group's Insider Trades.

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