A Robert Half insider sold $4.2 million worth of stock on Monday. This transaction is notable considering the company’s shares are trading at a rich valuation after increasing 25.8% in the last six months.
Insider Selling: Robert Half
Paul Gentzkow, President and COO of Staffing Services, sold 74,753 shares of Robert Half (NYSE: RHI) worth a total of $4.2 million on Monday, February 5th. In fact, Mr. Gentzkow has sold $11.5 million worth of stock when combining the 130,247 shares he sold on Friday.
|Insider Trading||Relationship||Date||#Shares||Value ($)|
|Paul Gentzkow||President and COO||Feb 05||74,753||$4,209,267|
|Paul Gentzkow||President and COO||Feb 02||130,247||$7,334,521|
Gentzkow has reduced his ownership stake by 32.5% in the last week.
The company’s shares last traded at $56.02 as of Tuesday, approximately 90.9% of its 52-week high. While the stock is near its high, could the recent insider transaction signal a troubling road ahead for shareholders?
Finbox.io applies pre-built valuation models to calculate a fair value for a given stock and uses consensus Wall Street estimates for the forecast when available. The company’s average fair value of $48.62 implies -13.2% downside and is calculated from 10 separate analyses as shown in the table above.
|Analysis||Model Fair Value||Upside (Downside)|
|10-yr DCF Revenue Exit||$46.27||-17.4%|
|5-yr DCF Revenue Exit||$51.29||-8.4%|
|Peer Revenue Multiples||$55.72||-0.5%|
|10-yr DCF EBITDA Exit||$48.11||-14.1%|
|5-yr DCF EBITDA Exit||$54.36||-3.0%|
|Peer EBITDA Multiples||$55.37||-1.2%|
|10-yr DCF Growth Exit||$37.80||-32.5%|
|5-yr DCF Growth Exit||$37.15||-33.7%|
|Peer P/E Multiples||$55.96||-0.1%|
|Earnings Power Value||$44.14||-21.2%|
While insider activity on its own is not necessarily a buy or sell signal, it may offer insight into how ownership and management feel about a company’s future prospects. Keeping an eye on insider activity is just one of many data points that an investor should consider before making an investment decision.
Here are a few additional items that you should consider before drawing a conclusion:
Valuation: how much upside do shares of Robert Half have based on Wall Street’s consensus price target? Take a look at our analyst upside data explorer that compares the company’s upside relative to its peers.
Risk Metrics: What is Robert Half’s financial health? Find out by viewing our financial leverage data metric which measures the dollars in total assets for each dollar of common equity over time.
Efficiency Metrics: Is management becoming more or less efficient over time? Find out by analyzing the company’s asset turnover ratio which measures the dollars in revenue a company generates per dollar of assets.
Author: Andy Pai
Expertise: financial modeling, mergers & acquisitions
Andy is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights:
- Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores.
- Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets.
Andy can be reached at email@example.com.
As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.