This Insider Has Just Sold Shares In Consolidated Water

We wouldn't blame Consolidated Water Co. Ltd. (NASDAQ:CWCO) shareholders if they were a little worried about the fact that Frederick McTaggart, the CEO, President & Director recently netted about US$776k selling shares at an average price of US$33.50. However, that sale only accounted for 8.1% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Consolidated Water

Notably, that recent sale by Frederick McTaggart is the biggest insider sale of Consolidated Water shares that we've seen in the last year. That means that even when the share price was below the current price of US$34.34, an insider wanted to cash in some shares. 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 8.1% of Frederick McTaggart's holding.

All up, insiders sold more shares in Consolidated Water than they bought, 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Consolidated Water

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Does Consolidated Water Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Consolidated Water insiders own about US$33m worth of shares. That equates to 6.1% 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 Consolidated Water Insider Transactions Indicate?

The stark truth for Consolidated Water is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. 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 Consolidated Water. Case in point: We've spotted 1 warning sign for Consolidated Water 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 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.