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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Aqua America, Inc. (NYSE:WTR).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for Aqua America
Aqua America Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Chairman Christopher Franklin for US$835k worth of shares, at about US$32.86 per share. That implies that an insider found the current (approximate) price enticing. Of course they may have changed their mind. But this suggests they are optimistic. In any event it's generally a positive if insiders are buying shares at around the current price.
In the last twelve months insiders paid US$1.5m for 44.64k shares purchased. Overall, Aqua America insiders were net buyers last year. They paid about US$32.83 on average. Although they bought at below the recent price of US$35.91 per share, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this freelist of growing companies that insiders are buying.
Aqua America Insiders Bought Stock Recently
Over the last quarter, Aqua America insiders have spent a meaningful amount on shares. Overall, 5 insiders shelled out US$1.5m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Insider Ownership of Aqua America
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Aqua America insiders own 0.3% of the company, worth about US$19m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Aqua America Insider Transactions Indicate?
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 Aqua America we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Aqua America, you should check out this freereport on analyst forecasts for the company.
Of course Aqua America may not be the best stock to buy. So you may wish to see this freecollection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.