Flex Ltd (NASDAQ:FLEX) CEO Revathi Advaithi has recently sold a significant number of shares in the company. The transaction, which took place on June 11, 2024, involved the sale of 54,637 ordinary shares at a weighted average price of $32.1966 per share, with the total value amounting to over $1.75 million. The actual sale prices varied, ranging from $31.93 to $32.48 per share.
The sale was reported to cover tax withholding obligations related to the vesting of restricted share units (RSUs). Following the transaction, CEO Revathi Advaithi still holds a substantial number of shares in Flex Ltd, with 1,787,725 shares remaining in her possession. This total includes 255,062 unvested RSUs set to vest in three equal annual installments beginning on June 14, 2024, and 128,017 unvested RSUs that will vest on June 1, 2025.
The transaction was executed directly by Advaithi, indicating her continued confidence in the company's future. Flex Ltd, a leader in the printed circuit boards industry, has a diverse range of capabilities in design, engineering, and manufacturing across various sectors.
Investors often monitor insider transactions such as these for insights into executive sentiment regarding their company's stock performance and valuation. While such sales are a routine part of executive compensation and financial planning, they can sometimes provide a glimpse into the leadership's perspective on the company's prospects.
The details of the sale were formally filed with the Securities and Exchange Commission, and the CEO has committed to providing full information regarding the number of shares sold at each price point upon request.
In other recent news, Flex has reported a resilient growth, despite a dip in revenue, in its Q4 and fiscal year 2024 results. The company's Q4 revenue was $6.2 billion, a 12% year-over-year decrease, and the full-year revenue was $26.4 billion, a 7% drop. However, gross profit for the quarter improved to $532 million, and for the year, it reached $2.1 billion. Operating income rose by 3% to $1.3 billion, and earnings per share saw an 11% increase to $2.15.
In another development, Flex announced the acquisition of FreeFlow, a specialist in asset disposition and digital circular economy tracking for secondary markets. This move aims to boost Flex's product lifecycle services by enabling the sale of surplus and returned inventory through FreeFlow's B2B digital marketplace.
Analyst notes suggest a flat to 3% decline in revenue for fiscal 2025, with adjusted operating margins between 5.2% and 5.4%, and an adjusted EPS between $2.30 and $2.50. Flex plans to broaden the reach of FreeFlow's services into additional industry segments and regions, marking a strategic step towards meeting the growing demand for circular economy solutions.
InvestingPro Insights
Amid the news of Flex Ltd's CEO selling a significant number of shares, investors and analysts are keen to understand the company's current financial health and future outlook. According to recent data from InvestingPro, Flex Ltd boasts a market capitalization of $12.81 billion, reflecting its substantial presence in the Electronic Equipment, Instruments & Components industry. The company's P/E ratio stands at a modest 13.92, suggesting that its shares might be trading at reasonable valuations relative to its near-term earnings growth.
An InvestingPro Tip highlights that Flex Ltd is trading at a low P/E ratio relative to near-term earnings growth, which could indicate an attractive investment opportunity for value investors. Additionally, the company has experienced a large price uptick over the last six months, with a 67.11% return, signaling strong market confidence. This is further supported by the fact that Flex Ltd is trading near its 52-week high, at 93.7% of this threshold.
Investors should note that while some analysts have revised their earnings downwards for the upcoming period, the company has been recognized for its high shareholder yield, a metric that combines dividend payments and share buybacks to measure the total returns to shareholders. Management's aggressive share buyback strategy is a testament to their belief in the company's value, even as the CEO's recent sale was for tax obligations.
For those looking to delve deeper into Flex Ltd's financials and stock performance, InvestingPro offers additional insights and metrics. There are currently 13 more InvestingPro Tips available, which can be accessed through the dedicated InvestingPro page for Flex Ltd at https://www.investing.com/pro/FLEX. These tips can provide a more nuanced view of the company's position within its industry and its financial robustness. To gain access to these valuable insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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