Otis Worldwide Insiders Sell US$3.9m Of Stock, Possibly Signalling Caution

Many Otis Worldwide Corporation (NYSE:OTIS) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. 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.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Otis Worldwide

The Last 12 Months Of Insider Transactions At Otis Worldwide

Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Product, Peiming Zheng, for US$1.6m worth of shares, at about US$93.69 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$96.51. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 52% of Peiming Zheng's holding.

Otis Worldwide insiders didn't buy any shares over the last year. 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 Otis Worldwide Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Otis Worldwide. In total, Executive VP & Chief Product Peiming Zheng dumped US$1.6m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Otis Worldwide insiders own about US$43m worth of shares. That equates to 0.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Otis Worldwide Insider Transactions Indicate?

An insider hasn't bought Otis Worldwide stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Otis Worldwide is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Otis Worldwide. To that end, you should learn about the 4 warning signs we've spotted with Otis Worldwide (including 1 which doesn't sit too well with us).

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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.

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