Insiders are probably glad they sold their shares in SJW Group (NYSE:SJW) after 3.5% drop

By
Simply Wall St
Published
April 21, 2022
NYSE:SJW
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling US$297k worth of SJW Group (NYSE:SJW) stock at an average sell price of US$69.04 during the past year. The company’s market cap plunged by US$69m after price dropped by 3.5% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for SJW Group

The Last 12 Months Of Insider Transactions At SJW Group

The Independent Director, Katharine Armstrong, made the biggest insider sale in the last 12 months. That single transaction was for US$160k worth of shares at a price of US$69.58 each. That means that an insider was selling shares at around the current price of US$63.60. 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. The only individual insider seller over the last year was Katharine Armstrong.

Katharine Armstrong divested 4.30k shares over the last 12 months at an average price of US$69.04. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:SJW Insider Trading Volume April 21st 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of SJW Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. SJW Group insiders own about US$221m worth of shares (which is 11% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At SJW Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the SJW Group insiders selling. 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. When we did our research, we found 3 warning signs for SJW Group (1 is a bit concerning!) that we believe deserve your full attention.

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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.