Insider Decision Making Waves At Sherwin-Williams: Todd Rea Exercises Options, Realizing $0

Todd Rea, President at Sherwin-Williams (NYSE:SHW), reported a large exercise of company stock options on October 22, according to a new SEC filing.

What Happened: Rea, President at Sherwin-Williams, exercised stock options for 0 shares of SHW stock. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The exercise price of the options was $0.0 per share.

The Thursday morning update indicates Sherwin-Williams shares down by 0.89%, currently priced at $330.84. At this value, Rea's 0 shares are worth $0.

All You Need to Know About Sherwin-Williams

Sherwin-Williams is the largest provider of architectural paint in the United States. The company has over 5,000 stores and sells premium paint at higher price points than most competitors. Sherwin-Williams also sells paint-related products in big-box stores and provides coatings for original equipment manufacturers.

Sherwin-Williams's Economic Impact: An Analysis

Revenue Growth: Sherwin-Williams displayed positive results in 3 months. As of 30 June, 2025, the company achieved a solid revenue growth rate of approximately 0.69%. This indicates a notable increase in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Materials sector.

Exploring Profitability:

• Gross Margin: Achieving a high gross margin of 49.38%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Sherwin-Williams's EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 3.04.

Debt Management: Sherwin-Williams's debt-to-equity ratio stands notably higher than the industry average, reaching 2.9. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Valuation Overview:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 33.12 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 3.65 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): A high EV/EBITDA ratio of 22.08 reflects market recognition of Sherwin-Williams's value, positioning it as more highly valued compared to industry peers.

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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Why Insider Transactions Are Key in Investment Decisions

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.

In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Deciphering Transaction Codes in Insider Filings

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely 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 Sherwin-Williams's Insider Trades.

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