Flex Ltd. (NASDAQ:FLEX) Chief Financial Officer Paul Lundstrom has recently engaged in significant trading activity, according to the latest SEC filings. Lundstrom sold a total of 29,041 ordinary shares at a weighted average price range of $31.79 to $32.71, culminating in over $933,000 in proceeds.
The transactions occurred on June 12, just a day following the certification of performance criteria that led to the vesting of performance-based restricted share units (PSUs). The sale of shares by Lundstrom was primarily to cover tax withholding obligations associated with the vesting of these PSUs.
In addition to the sale, the filings also revealed Lundstrom was awarded 38,708 restricted share units (RSUs) on June 12. These RSUs are set to vest in three equal annual installments beginning on June 12, 2025. This award is part of a larger compensation structure that includes several tranches of RSUs vesting at different times, reflecting the company's long-term incentive plan for its executives.
Following these transactions, Lundstrom's holdings in Flex Ltd. adjusted to a total of 354,838 shares, which includes both vested and unvested shares. The unvested RSUs represent a future right to receive an equivalent number of unrestricted, fully transferable shares, contingent upon continued service and the achievement of certain conditions.
Investors often monitor insider transactions as they provide insights into executives' perspectives on the company's current valuation and future prospects. The sale of stocks by a CFO might be interpreted in various ways, but without additional context, it is simply a reflection of an executive's personal financial decisions and obligations.
Flex Ltd., headquartered in Singapore, operates in the field of printed circuit boards manufacturing and has a diverse global presence. The company's stock performance and insider trading activities are closely watched by investors seeking to understand the electronics manufacturing sector's trends and the strategic moves of its leadership.
In other recent news, global manufacturing partner Flex has acquired FreeFlow, an asset disposition and digital circular economy tracking specialist, to enhance its product lifecycle services. This move aims to promote sustainability and enable the sale of surplus and returned inventory through FreeFlow's B2B digital marketplace. FreeFlow's platform complements Flex's existing services, which range from design to post-sale solutions. The acquisition is part of Flex's larger effort to meet the growing demand for circular economy solutions.
In financial developments, Flex reported its Q4 and fiscal year 2024 results. Despite a 12% year-over-year decrease in Q4 revenue to $6.2 billion and a 7% drop in full-year revenue to $26.4 billion, the company demonstrated resilient growth with profitability metrics such as gross profit, operating income, and earnings per share (EPS) showing an increase. The 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 EPS saw an 11% increase to $2.15.
Flex's outlook for fiscal 2025 includes a prediction of flat to 3% decline in revenue, with adjusted operating margins between 5.2% and 5.4%, and an adjusted EPS between $2.30 and $2.50. The company also reported significant share buybacks in fiscal year 2024, totaling $1.3 billion. These recent developments signal resilience and potential for future growth for Flex.
InvestingPro Insights
Flex Ltd. (NASDAQ:FLEX) has shown a remarkable performance with a significant price uptick over the last six months, as indicated by the 53.59% total return in that period. This momentum is also reflected in the year-to-date price total return of 44.52%, positioning the company near its 52-week high, with prices at 93.85% of this peak. These robust returns highlight the company's strong market presence and could be a signal to investors about its potential for sustained growth.
From a valuation perspective, Flex is currently trading at a P/E ratio of 13.84, which is considered low relative to its near-term earnings growth. This attractive valuation is further supported by a PEG ratio of 0.62, suggesting that the stock might be undervalized considering its earnings growth potential. Investors looking for value in the Electronic Equipment, Instruments & Components industry may find Flex's current valuation compelling, especially when coupled with the company's proactive management, which has been aggressively buying back shares, indicating confidence in the company's future prospects.
While the company does not pay dividends, suggesting a focus on reinvesting earnings into growth and share buybacks, it is important to note that analysts have revised their earnings expectations downwards for the upcoming period. Investors may want to keep an eye on how these revisions could impact the stock's future performance. For those interested in deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/FLEX, which could provide further insights into Flex Ltd.'s financial health and market position. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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