James E DeVries, Executive Vice President at Nordson NDSN, reported an insider buy on December 23, according to a new SEC filing.
What Happened: DeVries's recent purchase of 1,642 shares of Nordson, disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday, reflects confidence in the company's potential. The total transaction value is $344,376.
At Tuesday morning, Nordson shares are up by 0.11%, trading at $209.53.
About Nordson
Nordson manufactures equipment (including pumps, valves, dispensers, applicators, filters, and pelletizers) used for dispensing adhesives, coatings, sealants, and other materials. The firm serves a diverse range of end markets including packaging, medical, electronics, and industrial. Nordson's business is organized into three segments: industrial precision solutions, medical and fluid solutions, and advanced technology solutions. The company generated approximately $2.7 billion in revenue in its fiscal 2024.
Financial Insights: Nordson
Revenue Growth: Nordson's revenue growth over a period of 3 months has been noteworthy. As of 31 October, 2024, the company achieved a revenue growth rate of approximately 12.53%. This indicates a substantial increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Industrials sector.
Key Insights into Profitability Metrics:
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Gross Margin: The company maintains a high gross margin of 54.11%, indicating strong cost management and profitability compared to its peers.
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Earnings per Share (EPS): Nordson's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 2.14.
Debt Management: Nordson's debt-to-equity ratio stands notably higher than the industry average, reaching 0.75. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.
Valuation Metrics: A Closer Look
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Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 25.81, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
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Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 4.48, Nordson's stock is perceived as being overvalued in the market, particularly in relation to sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Nordson's EV/EBITDA ratio stands at 17.44, surpassing industry benchmarks. This places the company in a position with a higher-than-average market valuation.
Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.
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The Importance of Insider Transactions
It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.
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 To Focus On
When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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 Nordson's Insider Trades.
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