Accel Entertainment, Inc. (NYSE:ACEL) Secretary Derek Harmer has recently sold shares of the company's stock, according to a new SEC filing. On July 12, 2024, Harmer sold 5,000 shares of Accel Entertainment's Class A-1 Common Stock at a price of $10.50 per share, resulting in a total transaction value of $52,500.
The transaction was executed under a Rule 10b5-1 trading plan, which Harmer had adopted on December 15, 2023. Such plans allow company insiders to establish pre-arranged plans to sell stocks at a predetermined time to avoid accusations of insider trading. At the time the plan was adopted, Harmer confirmed that he was not in possession of any material nonpublic information about the company.
Following the sale, Harmer still owns a substantial number of shares in the company, specifically 182,804 shares of Class A-1 Common Stock, indicating a continued vested interest in the company's performance.
Investors and market watchers often monitor insider sales as they provide insights into an insider’s perspective on the company’s current valuation and future prospects. However, it is also common for executives to sell portions of their holdings for personal financial management, including diversification and liquidity.
Accel Entertainment, based in Burr Ridge, Illinois, operates within the amusement and recreation services sector. The company, incorporated in Delaware, has been publicly traded and continues to maintain its business address in Burr Ridge.
The details of the transaction were made public through the SEC's Form 4 filing, which is used to report changes in company insiders' ownership positions. As of the date of the sale, the stock price of Accel Entertainment and the subsequent actions of other company insiders remain a point of interest for those following the company's stock.
In other recent news, Accel Entertainment reported steady growth in Q1 2024, with a year-over-year revenue increase of 2.9% to $302 million and a slight 0.3% rise in adjusted EBITDA to $46 million. The company's expansion into new locations and a robust pipeline for future growth contributed to these results, despite negative same-store sales growth due to poor weather. Accel Entertainment has also announced a $200 million share repurchase program.
Despite challenges, the company is consistently outperforming competition in Illinois, Montana, Nevada, and Georgia. The company is actively evaluating multiple opportunities for expansion across the country, with the aim of understanding potential revenue fully before pricing new opportunities. This is part of the recent developments within the company.
However, it's important to note that same-store sales growth was negatively impacted by unfavorable weather conditions, and rising labor and material costs are causing the company to be more cautious about signing on new locations. Despite these factors, Accel maintains a strong balance sheet, with $286 million in net debt and $553 million in liquidity.
InvestingPro Insights
Accel Entertainment's (NYSE:ACEL) recent insider stock sale comes at a time of notable financial metrics and market performance for the company. According to data from InvestingPro, with a market capitalization of approximately $865.94 million USD, the company is trading at a price-to-earnings (P/E) ratio of 20.19, which adjusts to a lower 16.77 based on the last twelve months as of Q1 2024. This adjusted P/E ratio suggests a more favorable valuation compared to the standard P/E ratio. Additionally, the company's price/book (P/B) ratio stands at 4.3, which is considered high, indicating that the market currently values the company's assets at a premium.
On the operational front, Accel Entertainment has seen a gross profit margin of 30.23% over the last twelve months as of Q1 2024, reflecting a healthy ability to generate earnings relative to its revenue. This profitability is further underscored by the fact that analysts predict the company will be profitable this year, a projection that aligns with the company's recent profitable performance over the last twelve months.
From an investment standpoint, one of the InvestingPro Tips highlights that Accel's liquid assets exceed its short-term obligations, providing the company with a solid liquidity position. This is a crucial factor for investors considering the financial health and operational stability of the company. Moreover, while Accel does not pay a dividend to shareholders, which is another InvestingPro Tip, this could be indicative of the company's strategy to reinvest earnings into growth and expansion.
For those interested in further insights, there are additional tips available on InvestingPro, which can be accessed with the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. As the market assesses the implications of insider transactions like Secretary Derek Harmer's recent sale, these financial metrics and InvestingPro Tips provide valuable context for understanding Accel Entertainment's current market position and future potential.
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