On June 13, 2023, Revathi Advaithi, CEO of Flex Ltd (FLEX, Financial), sold 66,912 shares of the company's stock. This move comes as part of a series of transactions by Advaithi over the past year, during which she has sold a total of 976,930 shares and purchased none. This article will provide an overview of Flex Ltd, analyze the insider buy/sell trends, and discuss the relationship between insider transactions and stock price.
Who is Revathi Advaithi of Flex Ltd?
Revathi Advaithi is the Chief Executive Officer of Flex Ltd, a leading global provider of design, engineering, manufacturing, and supply chain services. Advaithi joined Flex in 2019, bringing with her extensive experience in the technology and manufacturing sectors. Prior to joining Flex, she held leadership positions at Eaton Corporation and Honeywell International. Under her leadership, Flex has continued to expand its global footprint and deliver innovative solutions to its customers.
Flex Ltd's Business Description
Flex Ltd is a global electronics manufacturing services provider, offering a wide range of services to its customers, including design, engineering, manufacturing, and supply chain solutions. The company operates in various industries, such as automotive, consumer electronics, industrial, and medical. Flex's diverse portfolio of services and solutions enables it to cater to the unique needs of its customers and maintain a competitive edge in the market. With a strong focus on innovation and sustainability, Flex is committed to delivering high-quality products and services that meet the evolving demands of its customers and the global market.
Insider Buy/Sell Analysis and Relationship with Stock Price
Over the past year, there have been no insider buys for Flex Ltd, while there have been 37 insider sells. This trend suggests that insiders may have a bearish outlook on the company's stock. However, it is essential to consider the context of these transactions and the overall market conditions when analyzing insider trends.
On the day of Revathi Advaithi's recent sell, Flex Ltd's stock was trading at $26.58 per share, giving the company a market cap of $11.77 billion. The price-earnings ratio of 15.48 is lower than the industry median of 20.07 and lower than the company's historical median price-earnings ratio. This suggests that the stock may be undervalued compared to its peers and historical performance.
However, when considering the GuruFocus Value of $22.49, Flex Ltd has a price-to-GF-Value ratio of 1.18, indicating that the stock is modestly overvalued based on its intrinsic value.
The GF Value is calculated using historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow), a GuruFocus adjustment factor based on the company's past returns and growth, and future estimates of business performance from Morningstar analysts. This comprehensive approach provides a more accurate estimate of the stock's intrinsic value, which can be used to assess the relationship between insider transactions and stock price.
Conclusion
While the recent insider sell by Flex Ltd's CEO Revathi Advaithi may raise concerns for some investors, it is essential to consider the broader context of the company's performance, valuation, and market conditions. The stock appears to be modestly overvalued based on its GF Value, but its price-earnings ratio suggests that it may be undervalued compared to its industry peers and historical performance.
Investors should continue to monitor insider transactions and other relevant financial data to make informed decisions about their investments in Flex Ltd. As always, it is crucial to conduct thorough research and consider multiple factors before making any investment decisions.
