HP Inc. (NYSE:HPQ) has reported a significant transaction involving its President and CEO, Enrique Lores, who sold a total of 211,501 shares of the company’s common stock, netting over $7 million. The sale took place on September 12, 2024, and was executed at weighted average prices ranging from $32.96 to $33.40 per share, with the total proceeds amounting to approximately $7,013,373.
The transaction was conducted under a Rule 10b5-1 trading plan, which Lores had adopted on June 10, 2024. Rule 10b5-1 allows company insiders to set up a predetermined plan to sell company stocks in order to avoid accusations of insider trading. The plan outlines future trades to be made at specified prices, dates, and amounts, providing an affirmative defense against insider trading claims.
In addition to the sale, Lores also acquired 211,501 shares of HP stock through the exercise of options on the same day. These options, with a transaction total of $6,023,548, had an exercise price of $28.48 per share. Following these transactions, Lores's direct ownership in the company has been adjusted to a minimal number of shares. However, it should be noted that he indirectly holds a significant number of shares, 888,908 to be precise, through a limited partnership that he ultimately controls.
Investors and market watchers often pay close attention to insider transactions as they can provide insights into the executives’ perspectives on the company's future performance. The sale by Lores represents a substantial change in his investment position and may be of interest to current and potential shareholders.
HP Inc. has not provided any additional comments on the transactions at this time. Interested parties may request more detailed information regarding the specific prices and shares involved in the transactions from the company or the Securities and Exchange Commission.
In other recent news, HP Inc. reported mixed results in its third-quarter 2024 earnings. Despite a 2% year-over-year revenue increase, marking the first revenue growth in nine quarters, the company's earnings per share fell short of estimates. This was largely attributed to underperformance in HP's Print segment, which experienced a 5% quarter over quarter revenue drop. However, the Personal Systems segment showed resilience, driving the overall revenue increase.
HP is also in the midst of a legal case against the estate of the late British billionaire Mike Lynch, seeking up to $4 billion in damages related to the acquisition of the British tech company Autonomy. This follows HP's victory in a civil lawsuit against Lynch and Autonomy's former chief financial officer, Sushovan Hussain.
Loop Capital, TD Cowen, and Goldman Sachs have maintained their Hold and Neutral ratings on HP's shares. These ratings come after the recent earnings report and other developments, including HP's announcement of a new $10 billion share buyback program and reaffirmation of its fiscal 2024 free cash flow forecast of $3.1 to $3.6 billion.
HP is also accelerating its cost restructuring plans and introducing AI PCs, strategic efforts aimed at maintaining financial stability and growth. These are the latest developments for HP.
InvestingPro Insights
Amid the news of HP Inc.'s (NYSE:HPQ) CEO Enrique Lores's recent stock transactions, current and potential investors may find additional context in the company's financial health and market performance valuable. According to InvestingPro data, HP Inc. boasts a market capitalization of approximately $32.01 billion. The company's P/E ratio stands at 11.52, which suggests that it is trading at a relatively low price compared to its near-term earnings growth, as evidenced by a PEG ratio of just 0.42 for the last twelve months as of Q3 2024. This could indicate that the stock may be undervalued.
Despite a slight revenue decline of 2.48% in the last twelve months as of Q3 2024, HP Inc. has maintained a solid gross profit margin of 22.13%, with a gross profit of $11.8 billion. This financial stability is complemented by the company's commitment to returning value to shareholders. An InvestingPro Tip highlights HP Inc.'s high shareholder yield, which is supported by a dividend yield of 3.33% and a consistent dividend growth, with the dividend having increased for 7 consecutive years. Moreover, the company has maintained dividend payments for an impressive 54 consecutive years.
Investors may also appreciate knowing that HP Inc. is a prominent player in the Technology Hardware, Storage & Peripherals industry, and the stock generally trades with low price volatility. For those seeking more comprehensive insights, InvestingPro offers additional tips on HP Inc., with 11 more tips available at https://www.investing.com/pro/HPQ, which can provide a deeper understanding of the company's investment potential and market dynamics.
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