Insider Transaction: Richard Joe Walsh Sells $363K Worth Of Valero Energy Shares

On January 22, a recent SEC filing unveiled that Richard Joe Walsh, SVP at Valero Energy VLO made an insider sell.

What Happened: Walsh's decision to sell 2,899 shares of Valero Energy was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Monday. The total value of the sale is $363,056.

As of Tuesday morning, Valero Energy shares are up by 0.1%, currently priced at $129.25.

Delving into Valero Energy's Background

Valero Energy is one of the largest independent refiners in the United States. It operates 15 refineries with a total throughput capacity of 3.2 million barrels a day in the United States, Canada, and the United Kingdom. Valero also owns 12 ethanol plants with capacity of 1.6 billion gallons of ethanol a year and holds a 50% stake in Diamond Green Diesel, which has capacity to produce 1.2 billion gallons per year of renewable diesel.

Unraveling the Financial Story of Valero Energy

Decline in Revenue: Over the 3 months period, Valero Energy faced challenges, resulting in a decline of approximately -13.61% in revenue growth as of 30 September, 2023. This signifies a reduction in the company's top-line earnings. When compared to others in the Energy sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Holistic Profitability Examination:

• Gross Margin: The company faces challenges with a low gross margin of 9.79%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Valero Energy's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 7.49.

Debt Management: Valero Energy's debt-to-equity ratio is below the industry average. With a ratio of 0.44, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 4.4, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.31, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 2.8 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

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Illuminating the Importance of Insider Transactions

Insider transactions serve as a piece of the puzzle in investment decisions, rather than the entire picture.

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

For investors, a primary focus lies on transactions occurring in the open market, as indicated 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 Valero Energy's Insider Trades.

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