On May 30, 2023, Douglas Bruggeman, CFO, VP-Finance, and Treasurer of REX American Resources Corp (REX, Financial), sold 3,500 shares of the company's stock. This insider sell comes amidst a year where Bruggeman has sold a total of 3,500 shares and purchased none.
Who is Douglas Bruggeman?
Douglas Bruggeman has been with REX American Resources Corp since 1991 and has held various positions within the company. He was appointed as the CFO, VP-Finance, and Treasurer in 2008. Bruggeman's extensive experience in the company and the industry has made him a key figure in REX American Resources Corp's financial management.
REX American Resources Corp's Business Description
REX American Resources Corp is a leading producer of ethanol and by-products in the United States. The company operates through two segments: Ethanol and By-Products and Refined Coal. REX American Resources Corp is committed to producing clean, renewable energy and reducing greenhouse gas emissions. The company's ethanol production facilities are strategically located in the Midwest, where corn is abundant and transportation costs are minimized.
Insider Buy/Sell Analysis and Relationship with Stock Price
Over the past year, there have been no insider buys for REX American Resources Corp, while there has been one insider sell, which is the recent sale by Douglas Bruggeman. This could indicate that insiders believe the stock is fairly valued or overvalued, or they may be taking profits after a period of growth.
On the day of Bruggeman's recent sell, shares of REX American Resources Corp were trading at $35 apiece, giving the stock a market cap of $578.827 million. The price-earnings ratio is 21.07, which is higher than the industry median of 18.74 and higher than the company's historical median price-earnings ratio. This suggests that the stock may be overvalued compared to its peers and its historical valuation.
However, with a price of $35 and a GuruFocus Value of $43.43, REX American Resources Corp has a price-to-GF-Value ratio of 0.81. This means the stock is modestly undervalued based on its GF Value. The GF Value is an intrinsic value estimate developed by GuruFocus that takes into account historical multiples, a GuruFocus adjustment factor, and future estimates of business performance from Morningstar analysts.
Conclusion
The recent insider sell by Douglas Bruggeman, CFO, VP-Finance, and Treasurer of REX American Resources Corp, may raise questions about the company's valuation and future prospects. While the stock appears to be modestly undervalued based on its GF Value, the price-earnings ratio suggests that it may be overvalued compared to its peers and historical valuation. Investors should consider these factors and conduct further research before making any investment decisions.
It is essential to keep in mind that insider transactions should not be the sole basis for making investment decisions. While they can provide valuable insights into a company's prospects, it is crucial to consider other factors such as financial performance, industry trends, and overall market conditions.
