Summit Midstream Partners, LP (NYSE:SMLP) has reported in a recent SEC filing that executive vice president, general counsel, and chief compliance officer, James David Johnston, has sold a total of $12,150 worth of common units. The transactions, which took place on March 15, 2024, involved 600 common units sold at an average price of $20.25 per unit. The sales were executed in a range between $20.24 and $20.25, as disclosed in the filing footnotes.
In addition to the sales, Johnston also engaged in option exercises, known as "M" transactions, which resulted in no immediate cash inflow as they pertain to the conversion of phantom units into common units at no cost. These transactions are economically equivalent to owning the common units and are settled upon vesting.
Furthermore, Johnston disposed of common units valued at $178,153 to cover tax liabilities associated with the vesting of phantom units. These "F" transactions were carried out at a price of $18.45 per share.
The SEC filing also detailed the vesting of various tranches of phantom units, which are a form of compensation tied to the executive's continued employment and the company's performance criteria. Upon vesting, these units can be converted into common units or settled in cash, at the discretion of Summit Midstream Partners, LP.
After all the reported transactions, Johnston's total direct ownership in common units was adjusted to reflect the new balance. Summit Midstream Partners, LP, based in Houston, Texas, operates in the natural gas transmission sector and is managed by the directors and executive officers of its general partner, Summit Midstream GP, LLC.
Investors often monitor these filings to gain insight into executives' views on their company's stock, as buying and selling activities may signal their confidence or concerns about the firm's prospects.
InvestingPro Insights
Amidst recent executive stock transactions at Summit Midstream Partners, LP (NYSE:SMLP), investors may find additional context in the company's current financial metrics and market performance. Summit Midstream Partners, with a market capitalization of $192.79 million, is trading at a notably low Price / Book multiple of 0.31, suggesting that the company's stock might be undervalued relative to its book value.
The company's stock has experienced significant volatility, with a large price uptick of 33.24% over the last six months, yet it has taken a notable hit over the last week with an 11.31% decrease in price total return. This volatility is a critical factor for investors to consider when assessing the risk profile of their investment in SMLP.
Despite challenges, the valuation of Summit Midstream Partners implies a strong free cash flow yield, which could be an attractive aspect for those investors who focus on cash generation as a key investment metric. However, it's worth noting that the company has not been profitable over the last twelve months and does not pay a dividend to shareholders, which might influence investment decisions, particularly for income-focused investors.
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