Many American States Water Company (NYSE:AWR) insiders ditched their stock over the past year, which may be of interest to the company’s shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out the opportunities and risks within the US Water Utilities industry.
American States Water Insider Transactions Over The Last Year
The insider, Granville Hodges, made the biggest insider sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$89.90 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$98.99. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. We note that the biggest single sale was only 42% of Granville Hodges’s holding.
American States Water insiders didn’t buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does American States Water Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. American States Water insiders own about US$36m worth of shares. That equates to 1.0% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About American States Water Insiders?
It doesn’t really mean much that no insider has traded American States Water shares in the last quarter. Our analysis of American States Water insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing American States Water. When we did our research, we found 2 warning signs for American States Water (1 is a bit concerning!) that we believe deserve your full attention.
But note: American States Water may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Read More: Insiders at American States Water Company (NYSE:AWR) sold US$1.6m worth of stock,