James Chao, Senior Chairman at Westlake Chemical WLKP, reported an insider sell on May 30, according to a new SEC filing.
What Happened: Chao’s recent Form 4 filing with the U.S. Securities and Exchange Commission on Friday unveiled the sale of 3,700 shares of Westlake Chemical. The total transaction value is $81,770.
Monitoring the market, Westlake Chemical‘s shares up by 0.05% at $22.06 during Friday’s morning.
Unveiling the Story Behind Westlake Chemical
Westlake Chemical Partners LP is a part of the chemical industry in the United States. Its operations are conducted through OpCo, it acquires and develops ethylene production facilities, which convert ethane into ethylene. OpCo sells ethylene and its co-products such as propylene, crude butadiene, pyrolysis gasoline, and hydrogen to Westlake and other customers located in the United States. Its assets include three ethylene production facilities in Calvert City, Kentucky, and Lake Charles, Louisiana.
Financial Insights: Westlake Chemical
Decline in Revenue: Over the 3 months period, Westlake Chemical faced challenges, resulting in a decline of approximately -16.53% in revenue growth as of 31 March, 2025. This signifies a reduction in the company’s top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Materials sector.
Profitability Metrics: Unlocking Value
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Gross Margin: The company sets a benchmark with a high gross margin of 22.76%, reflecting superior cost management and profitability compared to its peers.
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Earnings per Share (EPS): Westlake Chemical’s EPS is below the industry average. The company faced challenges with a current EPS of 0.14. This suggests a potential decline in earnings.
Debt Management: With a high debt-to-equity ratio of 1.51, Westlake Chemical faces challenges in effectively managing its debt levels, indicating potential financial strain.
Valuation Metrics:
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Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 14.8 is lower than the industry average, indicating potential undervaluation for the stock.
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Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.71, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 2.46, Westlake Chemical presents a potential value opportunity, as investors are paying less for each unit of EBITDA.
Market Capitalization Analysis: Reflecting a smaller scale, the company’s market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.
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Why Insider Activity Matters in Finance
Considering insider transactions is valuable, but it’s crucial to evaluate them in conjunction with other investment factors.
When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
A new purchase by a company insider is a indication that they anticipate the stock will rise.
On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
Transaction Codes Worth Your Attention
Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Westlake Chemical’s Insider Trades.
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
