Board Member Of A.O. Smith Makes $150K Buy

A notable insider purchase on April 9, was reported by Christopher L Mapes, Board Member at A.O. Smith AOS, based on the most recent SEC filing.

What Happened: Mapes’s recent purchase of 2,468 shares of A.O. Smith, disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday, reflects confidence in the company’s potential. The total transaction value is $150,005.

A.O. Smith‘s shares are actively trading at $62.59, experiencing a up of 0.05% during Thursday’s morning session.

Get to Know A.O. Smith Better

A.O. Smith manufactures a broad lineup of water heaters, boilers, and water treatment products. The company has two reporting segments: North America (75% of sales) and rest of world (25% of sales). A.O. Smith is the leading manufacturer of water heaters in North America for the residential and commercial markets, with approximately 37% and 54% market share, respectively. Residential water heaters account for Most of North American sales and are distributed equally through wholesale and retail channels. Most of A.O. Smith’s international revenue is from China, a market the company entered during the mid-1990s.

A.O. Smith: A Financial Overview

Decline in Revenue: Over the 3 months period, A.O. Smith faced challenges, resulting in a decline of approximately -7.66% in revenue growth as of 31 December, 2024. This signifies a reduction in the company’s top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Profitability Metrics:

• Gross Margin: The company excels with a remarkable gross margin of 37.06%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): A.O. Smith’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.752617.

Debt Management: A.O. Smith’s debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.12.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 17.23 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 2.41, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio 11.34 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization Analysis: The company’s market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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Illuminating the Importance of Insider Transactions

Insider transactions, although significant, should be considered within the larger context of market analysis and trends.

In legal terms, an “insider” refers to any officer, director, or beneficial owner of more than ten percent of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Cracking Transaction Codes

When analyzing transactions, investors tend to focus on those in the open market, 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 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 A.O. Smith’s Insider Trades.

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