Have Insiders Sold A. O. Smith Shares Recently?

We wouldn't blame A. O. Smith Corporation (NYSE:AOS) shareholders if they were a little worried about the fact that James Stern, the Executive VP recently netted about US$1.2m selling shares at an average price of US$72.50. That's a big disposal, and it decreased their holding size by 12%, which is notable but not too bad.

Check out our latest analysis for A. O. Smith

The Last 12 Months Of Insider Transactions At A. O. Smith

Notably, that recent sale by James Stern is the biggest insider sale of A. O. Smith shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$76.02. 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 12%of James Stern's holding.

Over the last year we saw more insider selling of A. O. Smith 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does A. O. Smith Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that A. O. Smith insiders own 0.7% of the company, worth about US$81m. 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 A. O. Smith Insiders?

Insiders sold A. O. Smith shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - A. O. Smith has 3 warning signs we think you should be aware of.

But note: A. O. Smith 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 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.