DAVID SACHS, Director at Terex TEX, disclosed an insider purchase on December 17, based on a new SEC filing.
What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday unveiled that SACHS made a notable purchase of 20,000 shares of Terex, valuing at $995,000.
As of Tuesday morning, Terex shares are down by 0.12%, currently priced at $48.08.
Discovering Terex: A Closer Look
Terex is a top manufacturer of aerial work platforms, materials processing equipment, and specialty equipment, such as material handlers, cranes, and concrete mixer trucks. Its current composition is a result of numerous acquisitions over several decades and a recent shift to focus on its two core segments after divesting a handful of underperforming businesses. Terex's remaining segments see heavy demand in nonresidential construction as well as in maintenance, manufacturing, energy, and materials management.
Terex: Delving into Financials
Revenue Challenges: Terex's revenue growth over 3 months faced difficulties. As of 30 September, 2024, the company experienced a decline of approximately -6.05%. This indicates a decrease in top-line earnings. When compared to others in the Industrials sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Profitability Metrics:
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Gross Margin: With a low gross margin of 20.21%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.
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Earnings per Share (EPS): Terex's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 1.32.
Debt Management: Terex's debt-to-equity ratio is below the industry average. With a ratio of 0.32, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.
Understanding Financial Valuation:
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Price to Earnings (P/E) Ratio: Terex's P/E ratio of 7.03 is below the industry average, suggesting the stock may be undervalued.
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Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.64, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 5.45, Terex could be considered undervalued.
Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.
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Exploring the Significance of Insider Trading
Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.
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.
Understanding Crucial Transaction Codes
Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.
Check Out The Full List Of Terex's Insider Trades.
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