A significant insider buy by Melissa D Smith, Chair at WEX WEX, was executed on June 2, and reported in the recent SEC filing.
What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Monday showed that Smith purchased 3,721 shares of WEX. The total transaction amounted to $500,720.
The latest update on Tuesday morning shows WEX shares up by 2.56%, trading at $135.0.
Unveiling the Story Behind WEX
WEX Inc is a provider of corporate payment solutions. The company operates three business segments: Mobility, Benefits, and Corporate Payments. Mobility segment, the top segment by revenue, provides fleet vehicle payment solutions, transaction processing, and information management services for commercial and government fleets. The Corporate Payments segment offers business-to-business payment processing and transaction monitoring services. The Benefits segment generates revenue from healthcare payment products and its consumer-directed software platform. Wex’s largest end market is the United States of America.
Key Indicators: WEX’s Financial Health
Negative Revenue Trend: Examining WEX’s financials over 3 months reveals challenges. As of 31 March, 2025, the company experienced a decline of approximately -2.47% in revenue growth, reflecting a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Financials sector.
Holistic Profitability Examination:
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Gross Margin: The company excels with a remarkable gross margin of 57.59%, indicating superior cost efficiency and profitability compared to its industry peers.
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Earnings per Share (EPS): WEX’s EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 1.84.
Debt Management: WEX’s debt-to-equity ratio surpasses industry norms, standing at 6.89. This suggests the company carries a substantial amount of debt, posing potential financial challenges.
Financial Valuation:
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Price to Earnings (P/E) Ratio: WEX’s P/E ratio of 16.96 is below the industry average, suggesting the stock may be undervalued.
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Price to Sales (P/S) Ratio: The current P/S ratio of 2.04 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 5.76, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.
Market Capitalization Analysis: Reflecting a smaller scale, the company’s market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.
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Why Insider Transactions Are Important
Insider transactions shouldn’t be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.
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.
Exploring Key Transaction Codes
Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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 WEX’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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