We'd be surprised if Watts Water Technologies, Inc. (NYSE:WTS) shareholders haven't noticed that the President of Asia-Pacific, Elie Melhem, recently sold US$499k worth of stock at US$200 per share. The eyebrow raising move amounted to a reduction of 16% in their holding.
Watts Water Technologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Timothy Horne, sold US$2.5m worth of shares at a price of US$167 per share. That means that an insider was selling shares at slightly below the current price (US$198). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 30% of Timothy Horne's stake.
Watts Water Technologies 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Watts Water Technologies
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Watts Water Technologies insiders own 19% of the company, currently worth about US$1.3b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Watts Water Technologies Insider Transactions Indicate?
An insider hasn't bought Watts Water Technologies stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Watts Water Technologies makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Watts Water Technologies that deserve your attention before buying any shares.
Of course Watts Water Technologies may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.