Several Insiders Invested In American States Water Flagging Positive News

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of American States Water Company (NYSE:AWR), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for American States Water

The Last 12 Months Of Insider Transactions At American States Water

In the last twelve months, the biggest single purchase by an insider was when Independent Director Thomas Eichelberger bought US$100k worth of shares at a price of US$71.21 per share. We do like to see buying, but this purchase was made at well below the current price of US$84.04. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 6.35k shares worth US$484k. On the other hand they divested 400.00 shares, for US$33k. Overall, American States Water insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

American States Water is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At American States Water Have Bought Stock Recently

Over the last quarter, American States Water insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$90k worth of shares. This makes one think the business has some good points.

Does American States Water Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. American States Water insiders own about US$30m worth of shares. That equates to 1.0% 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.

What Might The Insider Transactions At American States Water Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of American States Water we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 2 warning signs for American States Water (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com