A new SEC filing reveals that E. Scott Santi, Board Member at Illinois Tool Works ITW, made a notable insider purchase on May 6,.
What Happened: In a recent Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, Santi increased their investment in Illinois Tool Works by purchasing 1,938 shares through open-market transactions, signaling confidence in the company’s potential. The total transaction value is $469,616.
The latest update on Wednesday morning shows Illinois Tool Works shares down by 1.13%, trading at $237.17.
Discovering Illinois Tool Works: A Closer Look
Founded in 1912, Illinois Tool Works has become a diversified industrial manufacturer through acquisitions and innovations that follow customer needs. ITW operates through seven business segments, with no segment representing more than one fifth of revenue. ITW’s automotive OEM segment sells vehicle components; its food equipment segment sells commercial kitchen appliances; its test & measurement and electronics segment sells inspection and analysis equipment; its welding segment sells welding equipment and consumables; its polymers & fluids segment sells industrial and consumer adhesives, solvents, and coatings; its construction products segment sells building fasteners and tools; and its specialty products segment sells medical, packaging, HVAC, and airport ground equipment.
Financial Milestones: Illinois Tool Works’s Journey
Revenue Growth: Illinois Tool Works’s revenue growth over a period of 3 months has faced challenges. As of 31 March, 2025, the company experienced a revenue decline of approximately -3.37%. This indicates a decrease in the company’s 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.
Holistic Profitability Examination:
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Gross Margin: The company excels with a remarkable gross margin of 43.71%, indicating superior cost efficiency and profitability compared to its industry peers.
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Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 2.39, Illinois Tool Works showcases strong earnings per share.
Debt Management: Illinois Tool Works’s debt-to-equity ratio is notably higher than the industry average. With a ratio of 2.55, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.
Insights into Valuation Metrics:
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Price to Earnings (P/E) Ratio: Illinois Tool Works’s P/E ratio of 21.12 is below the industry average, suggesting the stock may be undervalued.
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Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 4.51, Illinois Tool Works’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): With an impressive EV/EBITDA ratio of 15.79, Illinois Tool Works demonstrates exemplary market valuation, surpassing industry averages.
Market Capitalization Analysis: The company’s market capitalization surpasses industry averages, showcasing a dominant size relative to peers and suggesting a strong market position.
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Why Insider Transactions Are Important
Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it’s crucial to evaluate them in conjunction with other investment factors.
Considering the legal perspective, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, according to Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
Pointing towards optimism, a company insider’s new purchase signals their positive anticipation for the stock to rise.
Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.
Breaking Down the Significance of Transaction Codes
Examining transactions, investors often concentrate on those unfolding 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 Illinois Tool Works’s Insider Trades.
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
