JAMES HEARTY Executes Sell Order: Offloads $6.10M In DaVita Stock

JAMES HEARTY, Chief Compliance Officer at DaVita DVA, reported an insider sell on February 21, according to a new SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday outlined that HEARTY executed a sale of 50,946 shares of DaVita with a total value of $6,100,887.

In the Wednesday's morning session, DaVita's shares are currently trading at $123.0, experiencing a down of 0.0%.

Delving into DaVita's Background

DaVita is the largest provider of dialysis services in the United States, boasting market share that eclipses 35% when measured by both patients and clinics. The firm operates over 3,000 facilities worldwide, mostly in the U.S., and treats over 240,000 patients globally each year. Government payers dominate U.S. dialysis reimbursement. DaVita receives about two thirds of U.S. sales at government (primarily Medicare) reimbursement rates, with the remainder coming from commercial insurers. However, while commercial insurers represented only about 10% of the U.S. patients treated, they represent nearly all of the profits generated by DaVita in the U.S. dialysis business.

Financial Milestones: DaVita's Journey

Revenue Growth: DaVita's revenue growth over a period of 3 months has been noteworthy. As of 31 December, 2023, the company achieved a revenue growth rate of approximately 7.85%. This indicates a substantial increase in the company's top-line earnings. When compared to others in the Health Care sector, the company excelled with a growth rate higher than the average among peers.

Exploring Profitability:

• Gross Margin: The company excels with a remarkable gross margin of 32.02%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): DaVita's EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 1.67.

Debt Management: DaVita's debt-to-equity ratio is notably higher than the industry average. With a ratio of 10.53, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: DaVita's P/E ratio of 16.58 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.94 is lower than the industry average, implying a discounted valuation for DaVita's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 9.25, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

Market Capitalization: Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.

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The Importance of Insider Transactions

Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.

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.

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 DaVita's Insider Trades.

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