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$307k worth of stock at US$94.06 per share. That sale was 13% of their holding, so it does make us raise an eyebrow.
Watts Water Technologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Director Emeritus, Timothy Horne, sold US$1.9m worth of shares at a price of US$81.00 per share. That means that even when the share price was below the current price of US$95.16, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 47% of Timothy Horne's holding.
We note that in the last year insiders divested 78846 shares for a total of US$6.4m. Watts Water Technologies insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by 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!
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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. I reckon it's a good sign if insiders own a significant number of shares in the company. Watts Water Technologies insiders own about US$629m worth of shares (which is 20% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Watts Water Technologies Tell Us?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Watts Water Technologies is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Watts Water Technologies.
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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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