Anyone interested in A. O. Smith Corporation (NYSE:AOS) should probably be aware that the Independent Director, Mark Smith, recently divested US$250k worth of shares in the company, at an average price of US$51.94 each. However, the silver lining is that the sale only reduced their total holding by 3.2%, so we’re hesitant to read anything much into it, on its own.
The Last 12 Months Of Insider Transactions At A. O. Smith
Over the last year, we can see that the biggest insider sale was by the Independent Director, Paul Jones, for US$980k worth of shares, at about US$49.00 per share. That means that an insider was selling shares at slightly below the current price (US$51.52). 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. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 10.0% of Paul Jones’s holding.
In the last twelve months insiders netted US$2.8m for 56639.46 shares sold. In the last year A. O. Smith insiders didn’t buy any company stock. 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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Does A. O. Smith 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that A. O. Smith insiders own 1.2% of the company, worth about US$103m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About A. O. Smith Insiders?
Insiders sold stock recently, but they haven’t been buying. And even if we look to the last year, we didn’t see any purchases. On the plus side, A. O. Smith makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in A. O. Smith, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
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