Edgewater Technology Inc. (EDGW, Financial) directors purchased a combined 85,000 shares on March 3.
According to SEC filings, Kurt Wolf purchased 20,000 shares of the company for $6.83 per share, Stephen Bova purchased 15,000 shares for $6.62 per share and Frederick DiSanto bought 50,000 shares for $6.59 per share.
Wolf now owns 70,000 shares of the company, Bova owns 15,700 shares and DiSanto owns 50,000 shares.
Founded in 1992 and headquartered in Wakefield, Massachusetts, Edgewater Technology provides management consulting, technical knowledge and enterprise management solutions to develop custom technology and business process solutions.
The company offers product-based consulting and classic consulting; primarily in enterprise performance management and enterprise resource planning.
Edgewater Technology has a market cap of $84.24 million, an enterprise value of $69.55 million, a price-book (P/B) ratio of 1.07 and a price-sales (P/S) ratio of 0.67.
According to GuruFocus, Edgewater Technology has a 7 out of 10 financial strength rating with a cash-debt ratio of 3.94 and an equity-asset ratio of 0.72. The Beneish M-score of -2.96 indicates the company is a manipulator of its financial statements.
The company has a 5 out of 10 profitability and growth rating. It has an operating margin of 3.57%, a net margin of -2.24%, a return on equity (ROE) of -3.75%, three-year revenue growth of 6.60% and three-year EBITDA growth of 10.50%.
The company significantly improved its key operating metrics for fourth-quarter 2016 compared to its fourth-quarter results from one year ago.
- Total revenue was $29.8 million, up from $28.4 million.
- Gross profit was $12 million, or 40.2% of total revenue, compared to $9.8 million, or 34.4% of total revenue.
- Net loss was $3.4 million, or 28 cents per diluted share, compared to a net loss of $4.6 million, or 40 cents per diluted share, a year earlier.
- Cash flow provided from operating activities was $5.4 million, up from $2.4 million in fourth-quarter 2015.
The company also saw an improvement in its full-year results.
- Total revenue was $126.5 million, up from $116.7 million in 2015.
- Gross profit was $46.2 million, or 36.5% of total revenue, compared to $39.6 million, or 33.9% of total revenue.
- Net loss was $2.8 million, or 23 cents per diluted share, compared to a net loss of $4.1 million, or 35 cents per diluted share.
- Cash flow from operating activities was $6.6 million, an increase from $3.3 million in 2015.
Edgewater Technology is currently trading close to its three-year low in price.
Gurus John Rogers (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) both reduced their holdings of Edgewater Technology during the fourth quarter. Since then, the company’s market price has dropped an estimated 13%.
Below is a Peter Lynch chart that shows Edgewater Technology is trading above its intrinsic value.
Disclosure: Author does not own any shares of this company.
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