M. Steven Bender Implements A Sell Strategy: Offloads $677K In Westlake Stock

M. Steven Bender, EVP & CFO at Westlake WLK, executed a substantial insider sell on March 7, according to an SEC filing.

What Happened: After conducting a thorough analysis, Bender sold 4,804 shares of Westlake. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The total transaction value is $677,455.

As of Thursday morning, Westlake shares are down by 0.0%, currently priced at $141.17.

Delving into Westlake's Background

Westlake Corp is a manufacturer and supplier of chemicals, polymers and building products. Its Performance and Essential Materials segment offers a wide range of essential building blocks for making products utilized in everyday living, including olefins, vinyl chemicals, polyethylene, and epoxies. Its Housing and Infrastructure Products segment produces key finished goods for building products, pipe and fittings, and global compounds businesses.

Understanding the Numbers: Westlake's Finances

Revenue Challenges: Westlake's revenue growth over 3 months faced difficulties. As of 31 December, 2023, the company experienced a decline of approximately -14.34%. This indicates a decrease in top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Materials sector.

Key Profitability Indicators:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 7.04%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Westlake's EPS reflects a decline, falling below the industry average with a current EPS of -3.86.

Debt Management: Westlake's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.54.

Exploring Valuation Metrics Landscape:

• Price to Earnings (P/E) Ratio: A higher-than-average P/E ratio of 38.15 suggests caution, as the stock may be overvalued in the eyes of investors.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 1.45 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio of 10.35, the company's market valuation exceeds industry averages.

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

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Understanding the Significance of Insider Transactions

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

Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per 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.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Transaction Codes Worth Your Attention

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 Westlake's Insider Trades.

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