On June 26, 2023, Fred Hite, the Chief Operating Officer and Chief Financial Officer of OrthoPediatrics Corp (KIDS, Financial), sold 4,356 shares of the company's stock. This move comes as part of a series of insider transactions over the past year, with Hite selling a total of 4,356 shares and purchasing none.
OrthoPediatrics Corp is a medical device company focused on providing products and services for the pediatric orthopedic market. The company's mission is to improve the lives of children suffering from orthopedic conditions by offering innovative solutions to surgeons and healthcare providers.
Insider Trends
The insider transaction history for OrthoPediatrics Corp reveals that there have been no insider buys over the past year. In contrast, there have been eight insider sells during the same period. This trend may indicate that insiders are less confident in the company's future prospects or are taking advantage of a high stock price to cash out their holdings.
Valuation
On the day of Fred Hite's recent sale, shares of OrthoPediatrics Corp were trading at $43.69, giving the stock a market cap of $1.007 billion. The price-earnings ratio is 215.95, which is higher than the industry median of 29.21 and lower than the company's historical median price-earnings ratio.
With a price of $43.69 and a GuruFocus Value of $62.94, OrthoPediatrics Corp has a price-to-GF-Value ratio of 0.69. This suggests that the stock is a possible value trap, and investors should think twice before investing based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus, calculated based on the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
Conclusion
While Fred Hite's recent sale of 4,356 shares of OrthoPediatrics Corp may raise some concerns among investors, it is essential to consider the broader context of insider transactions and the company's valuation. The lack of insider buys over the past year and the high price-earnings ratio may suggest caution is warranted. However, the stock's price-to-GF-Value ratio indicates that it may still hold some potential for value-oriented investors.
As a financial stock market writer for gurufocus.com, it is crucial to analyze insider transactions and their relationship with stock prices. In the case of OrthoPediatrics Corp, investors should carefully consider the insider trends and valuation metrics before making any investment decisions.
