Don't Ignore The Fact That This Insider Just Sold Some Shares In Xylem Inc. (NYSE:XYL)

By
Simply Wall St
Published
March 22, 2021
NYSE:XYL

Some Xylem Inc. (NYSE:XYL) shareholders may be a little concerned to see that the Independent Director, Markos Tambakeras, recently sold a substantial US$510k worth of stock at a price of US$102 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 6.4%.

See our latest analysis for Xylem

The Last 12 Months Of Insider Transactions At Xylem

The Independent Director, Steven Loranger, made the biggest insider sale in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$83.95 each. That means that an insider was selling shares at slightly below the current price (US$104). 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 only 19% of Steven Loranger's holding.

Xylem insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:XYL Insider Trading Volume March 22nd 2021

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Does Xylem Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. Xylem insiders own about US$75m worth of shares. That equates to 0.4% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Xylem Insiders?

Insiders haven't bought Xylem 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. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 4 warning signs for Xylem you should be aware of.

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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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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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