On September 12, 2023, Marcus Brown, the Executive Vice President and General Counsel of Entergy Corp (ETR, Financial), sold 13,500 shares of the company. This move is part of a series of transactions made by the insider over the past year, which have seen a total of 26,000 shares sold and no shares purchased.
Marcus Brown has been with Entergy Corp for several years, serving in various leadership roles. As the company's EVP and General Counsel, he is responsible for overseeing all legal matters and providing strategic advice to the company's executive team.
Entergy Corp is a Fortune 500 integrated energy company engaged primarily in electric power production and retail distribution operations. The company owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 9,000 megawatts of nuclear power. Entergy delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.
The insider's recent sell-off has raised some eyebrows among investors and analysts. To understand the implications of this move, it's essential to look at the company's insider trading history and its relationship with the stock price.
Over the past year, there has been only one insider buy at Entergy Corp, compared to six insider sells. This trend could indicate that insiders believe the company's stock is overvalued, prompting them to sell their shares.
However, it's also crucial to consider the company's valuation. On the day of the insider's recent sell, Entergy Corp's shares were trading at $95.4, giving the company a market cap of $20.24 billion. The price-earnings ratio was 14.59, lower than both the industry median of 15.19 and the company's historical median price-earnings ratio.
According to GuruFocus Value, which is an intrinsic value estimate based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates, Entergy Corp's stock is modestly undervalued. The stock's price-to-GF-Value ratio is 0.8, with a GF Value of $118.72, suggesting that the stock has potential for growth.
In conclusion, while the insider's recent sell-off might raise concerns, the company's valuation indicates that Entergy Corp's stock is undervalued. Investors should keep a close eye on the company's performance and any future insider transactions to make informed decisions.
