Are Valaris plc (VAL) Insider Transactions Creating an Opportunity?

On December 03, 2019, Valaris plc (NYSE:VAL) shares lost -6.31% or -0.27 points to close at $4.01 with a heavy trading volume of 7.135 million shares. It opened the trading session at $4.11, the shares rose to $4.17 and dropped to $3.97, the range by which the price of stock traded the whole day. The company now has a market cap of $823 million and currently has 205.31 million outstanding shares. Valaris plc (VAL) stock has plunged -11.87 percent of market value in 21 trading days.

VAL stock’s trailing 3-year beta is 2.42, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was -$1.69 share in the trailing 52 weeks. The stock’s value fallen -71.84 percent year to date (YTD) compared to a decline of -82.32 percent in 52 week’s period. The firm’s shares are still trading -83.95 percent below its 1-year high of $24.98 and 17.25 percent up from 52-week low of $3.42. The average consensus ranking on the company is 2.6, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Valaris plc (VAL) is most likely going to rise 114.46 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $23-month high price target. This represents a whopping 473.57 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $6.2, which means a return possibility of 54.61 percent in comparison with the closing price of the stock of $4.01 on December 03. The lowest price set for the stock is $3.5 — just above -12.72 percent from VAL share price now.

Past records have indicated that shares in Valaris plc rose on 17 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of VAL’s Q4 earnings on February 26. Analysts are predicting revenue to climb 28.7 percent to $514M in the financial fourth quarter, while EPS will soar by about -12.82 percent to -$1.36 per share. In the last quarter, it earnings of -$1.27 per share came better than the -$1.32306, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $399M, missing the $404.69M analysts had expected. Earnings are seen to rise by -70.9 percent this year, 22.4 percent in the coming year and the trend continues by 5.13 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at Valaris plc (NYSE:VAL) and observe the pattern. The earliest insider trade happened on 12/07/2015. Hendrickson Gary E parted with a total of 50 thousand shares of the firm at average share price of $84.66. The total amount for the sale was set at $4.23 million. On completing this exchange, the Chairman, President and CEO account balance was 146.78 thousand shares. The stock lost -94.94 percent from that insider sale. On 06/24/2015, HECKES HOWARD C, Executive Vice President, did a sale of 8 thousand shares at a price of $84.82 per share. This got rid of 678.56 thousand shares from the insider’s fortune and the stock experienced a -94.95 percent retreat in price since the news became public. This exchange saw 49.08 thousand shares get out from the Executive Vice President account.

On 11/28/2014, Senior Vice President Blaine Anthony L recorded a sale transaction valued at $1.33 million. The sale at $83 a share has eliminated 16 thousand shares from the insider’s portfolio position. Meanwhile, shares price witnessed -94.84 percent decrease since the transaction reporting date. The company insider is left with 35.73 thousand shares remaining in the account. BALLBACH JOHN M, who works as Director at the company, performed a purchase of 2.5 thousand shares in a transaction worth $193.53 thousand. The acquisition recorded on 10/01/2014 was priced at $77.41 per share. The stock price plunged -94.47 percent since the transaction. BALLBACH JOHN M currently holds a stake of 9.79 thousand in VAL stock which is worth $39.25 thousand after the insider buying.

The stock is lingering around the initial support level of $3.93. After this, the following support is at the zone of $3.85. Up until the time the VAL stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 45.56 on the daily chart, and this may be a cause for concern. In case the price goes below $3.85 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $4.13 level may cause a pull-back move approaching $4.25 mark.

Valaris plc has a 14.8% gross profit margin, with its operating margin around -28.5%. Alongside this, the company’s net profit margin currently stands at -8.6%.