Paul Lundstrom, the Chief Financial Officer of Flex Ltd. (NASDAQ:FLEX), a leading company in the printed circuit boards industry, has recently sold a portion of his company shares. The transaction, which took place on June 4, 2024, involved the sale of 13,725 ordinary shares at a weighted average price ranging from $32.32 to $33.04, resulting in a total sale value of approximately $446,515.
The shares were sold primarily to cover tax withholding obligations that arose from the vesting of restricted share units (RSUs), as disclosed in a footnote of the filing. Lundstrom's sale represents a common practice among executives to manage the tax implications associated with the vesting of equity awards.
Following the transaction, Lundstrom's remaining stake in the company includes a significant number of unvested RSUs. These RSUs are scheduled to vest on various dates between June 9, 2024, and June 1, 2025, and represent a contingent right to receive additional unrestricted, fully transferable shares of Flex Ltd.
Investors often monitor insider transactions such as these for insights into executive sentiment regarding their company's stock. While sales to cover tax obligations are routine, the size and timing of such transactions can still provide valuable context for the market.
Flex Ltd., formerly known as Flextronics International Ltd., is headquartered in Singapore and has a robust presence in the manufacturing sector, specializing in the production of printed circuit boards and other electronic components. The company's shares are traded on the NASDAQ under the ticker symbol FLEX.
In other recent news, Flex has announced its acquisition of FreeFlow, a specialist in asset disposition and digital circular economy tracking for secondary markets. This move is aimed at enhancing Flex's product lifecycle services and promoting sustainability by allowing the sale of surplus and returned inventory through FreeFlow's B2B digital marketplace. This acquisition is expected to generate additional revenue for Flex's customers and support their environmental commitments.
In financial updates, Flex reported its Q4 and fiscal year 2024 results, revealing a decrease in revenue, but an increase in profitability metrics. 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 the company's outlook for fiscal 2025, there is 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. Flex also reported significant share buybacks in fiscal year 2024, totaling $1.3 billion. The company expects its power and compute-based revenue to account for 40% of total revenue by 2029, with significant growth in the cloud business. These recent developments are part of Flex's strategic focus on digitization, regionalization, and sustainability.
InvestingPro Insights
Amid the recent insider transaction at Flex Ltd. (NASDAQ:FLEX), where CFO Paul Lundstrom sold shares primarily for tax obligations, it's noteworthy to consider the company's financial health and market performance. Flex Ltd. has been showing signs of active management with an aggressive share buyback strategy, as one of the InvestingPro Tips highlights. This could indicate a bullish stance from management regarding the company's valuation and future prospects.
Moreover, the company is trading at a P/E ratio of 13.94, which suggests that it is valued reasonably relative to its near-term earnings growth. Another InvestingPro Tips points out that Flex Ltd. is trading at a low P/E ratio relative to its earnings growth, which may appeal to value investors looking for potential bargains in the market.
From a data perspective, the InvestingPro Data reveals a substantial 74.61% price uptick over the last six months, with the current price hovering near the 52-week high at 94.55% of that level. The company's market capitalization stands at $12.96B USD, reflecting its significant presence in the electronic equipment, instruments, and components industry. Additionally, despite a revenue decline of -7.32% in the last twelve months as of Q4 2024, Flex Ltd. has maintained a gross profit margin of 7.65%.
For investors seeking a deeper dive into Flex Ltd.'s performance and potential, there are additional InvestingPro Tips available on the platform. These tips offer insights into various aspects of the company's operations and financials. To explore these further, users can take advantage of the special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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