Insiders At United Utilities Group Sold UK£1.7m In Stock, Alluding To Potential Weakness

Over the past year, many United Utilities Group PLC (LON:UU.) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for United Utilities Group

United Utilities Group Insider Transactions Over The Last Year

The insider, Steven Mogford, made the biggest insider sale in the last 12 months. That single transaction was for UK£1.0m worth of shares at a price of UK£10.46 each. That means that an insider was selling shares at below the current price (UK£10.60). 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. It is worth noting that this sale was 100% of Steven Mogford's holding.

Over the last year we saw more insider selling of United Utilities Group shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insiders At United Utilities Group Have Sold Stock Recently

There was substantially more insider selling, than buying, of United Utilities Group shares over the last three months. We note insiders cashed in UK£135k worth of shares. On the flip side, General Counsel & Company Secretary Simon Gardiner spent UK£20k on purchasing shares (as mentioned above) . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership

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. Our data suggests United Utilities Group insiders own 0.04% of the company, worth about UK£3.0m. We prefer to see high levels of insider ownership.

So What Do The United Utilities Group Insider Transactions Indicate?

Unfortunately, there has been more insider selling of United Utilities Group stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we're not rushing to buy, to say the least. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with United Utilities Group and understanding these should be part of your investment process.

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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 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.