In a recent transaction, Timothy J. Jahnke, a director at Zurn Elkay Water Solutions Corp (NYSE:ZWS), sold 4,086 shares of the company's common stock. The sale, executed on July 31, 2024, totaled approximately $134,875, with shares sold at a weighted average price of $33.0091.
The transaction was conducted under a Rule 10b5-1 trading plan, which allows company insiders to set up a predetermined plan to sell stocks at a specific time or price, providing them a defense against potential accusations of insider trading. The prices at which the shares were sold ranged from $33.00 to $33.02, according to a footnote in the filing.
Following the sale, Jahnke still holds a substantial number of shares in the company. The direct holdings in Zurn Elkay Water Solutions Corp amount to 389,399 shares, while an additional 200,000 shares are indirectly owned through an irrevocable trust.
Investors and the market often closely monitor insider transactions as they may provide insights into an insider’s perspective on the company's current valuation and future prospects. However, such transactions can be influenced by various factors and do not necessarily indicate a direct correlation with the company's performance.
The sale was formally disclosed to the U.S. Securities and Exchange Commission in a Form 4 filing, which is required for any changes in the holdings of company insiders.
In other recent news, Zurn Water Solutions recorded a robust performance in the second quarter, displaying a 20% increase in adjusted EBITDA, significant margin expansion, and a core growth of 3%. The company generated $80 million in free cash flow and repurchased nearly 2 million shares, leading to an EBITDA increase of $35 million for the first half of the year. These recent developments indicate a strong financial position for Zurn Water Solutions.
Baird has adjusted its outlook on Zurn Water Solutions, raising the price target to $37 from $36 while maintaining a Neutral rating on the stock. This adjustment was based on the firm's recognition of Zurn Water's strong sales and margin performance, and its upgraded 2024 guidance due to better-than-expected margin results.
Zurn Water Solutions also reported strong growth in its Drinking Water sector, offsetting stagnant performance in other areas. The firm's solid balance sheet positions it well for strategic capital deployment. A recent change in leadership at Zurn Water Solutions is expected to offer more flexibility within the company. This is in line with Baird's note that the company has shown commendable internal execution amidst a varied market environment.
InvestingPro Insights
With the recent insider transaction at Zurn Elkay Water Solutions Corp (NYSE:ZWS), investors may be keen to understand the current financial health and future prospects of the company. According to InvestingPro data, Zurn Elkay Water Solutions Corp has a market capitalization of $5.2 billion and is trading at a P/E ratio of 38.83. The company's revenue for the last twelve months as of Q2 2024 stood at $1.541 billion, with a modest revenue growth of 0.5%. Despite this slight growth, the company maintains a strong gross profit margin of 44.27%.
Delving into the company's performance, one of the InvestingPro Tips highlights that Zurn Elkay Water Solutions Corp is expected to experience net income growth this year. This aligns with the optimism of analysts, as evidenced by three analysts revising their earnings upwards for the upcoming period. Additionally, the company has been profitable over the last twelve months and analysts predict it will remain profitable this year. This is a critical factor for investors considering the stock's future earnings potential.
Another key insight from the InvestingPro Tips is the company's valuation. Zurn Elkay Water Solutions Corp is trading at a low P/E ratio relative to near-term earnings growth, which could signal an attractive investment opportunity for those who are bullish on the company's ability to grow its earnings. Furthermore, the company operates with a moderate level of debt and has liquid assets that exceed short-term obligations, suggesting a solid financial position.
For those interested in a deeper analysis, there are additional InvestingPro Tips available, offering further insights into Zurn Elkay Water Solutions Corp's valuation, financial health, and market performance. As of the latest update, there are six additional tips listed on InvestingPro's platform.
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