Multiple Insiders Sold Consolidated Water Shares Presenting Weak Signs For Investors

Consolidated Water Co. Ltd. (NASDAQ:CWCO) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. 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.

View our latest analysis for Consolidated Water

The Last 12 Months Of Insider Transactions At Consolidated Water

The Independent Chairman of the Board, Wilmer Pergande, made the biggest insider sale in the last 12 months. That single transaction was for US$89k worth of shares at a price of US$25.29 each. So what is clear is that an insider saw fit to sell at around the current price of US$24.95. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Consolidated Water insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Consolidated Water better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Consolidated Water Have Sold Stock Recently

The last quarter saw substantial insider selling of Consolidated Water shares. In total, insiders dumped US$156k 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

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Consolidated Water insiders own about US$23m worth of shares. That equates to 5.8% of the company. 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 Do The Consolidated Water Insider Transactions Indicate?

Insiders haven't bought Consolidated Water 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 Consolidated Water 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. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Consolidated Water is showing 2 warning signs in our investment analysis, and 1 of those can't be ignored...

Of course Consolidated Water may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.