Unitil Corporation (NYSE:UTL) drops to US$49.81, yet insiders may have sold too early fetching only US$46.16 apiece

By
Simply Wall St
Published
March 17, 2022
NYSE:UTL
Source: Shutterstock

Despite the fact that Unitil Corporation's (NYSE:UTL) value has dropped 6.0% in the last week insiders who sold US$291k worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$46.16 is still lower than the current share price.

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.

See our latest analysis for Unitil

The Last 12 Months Of Insider Transactions At Unitil

In the last twelve months, the biggest single sale by an insider was when the Senior Vice President of External Affairs & Customer Relations, Todd Black, sold US$291k worth of shares at a price of US$46.16 per share. That means that an insider was selling shares at slightly below the current price (US$49.81). 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. It is worth noting that this sale was only 22% of Todd Black's holding. The only individual insider seller over the last year was Todd Black.

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:UTL Insider Trading Volume March 17th 2022

I will like Unitil better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. It appears that Unitil insiders own 2.1% of the company, worth about US$17m. 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 Unitil Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Unitil shares in the last quarter. We don't take much encouragement from the transactions by Unitil insiders. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Unitil. Every company has risks, and we've spotted 3 warning signs for Unitil (of which 1 can't be ignored!) you should know about.

Of course Unitil 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, 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.