On May 6, Kelly J Grier, Board Member at Illinois Tool Works ITW executed a significant insider buy, as disclosed in the latest SEC filing.
What Happened: Grier demonstrated confidence in Illinois Tool Works by purchasing 763 shares, as reported in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total value of the transaction is $184,890.
At Wednesday morning, Illinois Tool Works shares are down by 1.13%, trading at $237.17.
Discovering Illinois Tool Works: A Closer Look
Founded in 1912, Illinois Tool Works has become a diversified industrial manufacturer through acquisitions and innovations that follow customer needs. ITW operates through seven business segments, with no segment representing more than one fifth of revenue. ITW’s automotive OEM segment sells vehicle components; its food equipment segment sells commercial kitchen appliances; its test & measurement and electronics segment sells inspection and analysis equipment; its welding segment sells welding equipment and consumables; its polymers & fluids segment sells industrial and consumer adhesives, solvents, and coatings; its construction products segment sells building fasteners and tools; and its specialty products segment sells medical, packaging, HVAC, and airport ground equipment.
Breaking Down Illinois Tool Works’s Financial Performance
Negative Revenue Trend: Examining Illinois Tool Works’s financials over 3 months reveals challenges. As of 31 March, 2025, the company experienced a decline of approximately -3.37% in revenue growth, reflecting a decrease in top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Industrials sector.
Profitability Metrics: Unlocking Value
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Gross Margin: The company maintains a high gross margin of 43.71%, indicating strong cost management and profitability compared to its peers.
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Earnings per Share (EPS): Illinois Tool Works’s EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 2.39.
Debt Management: Illinois Tool Works’s debt-to-equity ratio is notably higher than the industry average. With a ratio of 2.55, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.
Understanding Financial Valuation:
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Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 21.12, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
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Price to Sales (P/S) Ratio: The current P/S ratio of 4.51 is above industry norms, reflecting an elevated valuation for Illinois Tool Works’s stock and potential overvaluation based on sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Illinois Tool Works’s EV/EBITDA ratio of 15.79 exceeds industry averages, indicating a premium valuation in the market
Market Capitalization: Surpassing industry standards, the company’s market capitalization asserts its dominance in terms of size, suggesting a robust market position.
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Why Insider Activity Matters in Finance
Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.
When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
A new purchase by a company insider is a indication that they anticipate the stock will rise.
On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
Important Transaction Codes
Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Illinois Tool Works’s Insider Trades.
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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