Watts Water Technologies Insiders Sold US$16m Of Shares Suggesting Hesitancy

The fact that multiple Watts Water Technologies, Inc. (NYSE:WTS) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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.

See our latest analysis for Watts Water Technologies

The Last 12 Months Of Insider Transactions At Watts Water Technologies

The Chairman, Robert Pagano, made the biggest insider sale in the last 12 months. That single transaction was for US$4.4m worth of shares at a price of US$213 each. So we know that an insider sold shares at around the present share price of US$205. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last year Watts Water Technologies insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Watts Water Technologies Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Watts Water Technologies shares. In total, insiders sold US$9.2m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Watts Water Technologies Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Watts Water Technologies insiders own 19% of the company, worth about US$1.3b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Watts Water Technologies Insider Transactions Indicate?

Insiders haven't bought Watts Water Technologies stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Watts Water Technologies is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 - Watts Water Technologies has 1 warning sign we think you should be aware of.

But note: Watts Water Technologies 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.