Yahoo Finance Favourable Signals For American States Water: Numerous Insiders Acquired Stock
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in American States Water Company's (NYSE:AWR) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for American States Water
The Last 12 Months Of Insider Transactions At American States Water
The Independent Director Thomas Eichelberger made the biggest insider purchase in the last 12 months. That single transaction was for US$100k worth of shares at a price of US$71.21 each. That means that even when the share price was higher than US$70.41 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 6.35k shares worth US$484k. But they sold 400.00 shares for US$33k. In total, American States Water insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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.
American States Water Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at American States Water. Not only was there no selling that we can see, but they collectively bought US$90k worth of shares. That shows some optimism about the company's future.
Insider Ownership Of American States Water
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$25m worth of shares. That equates to 1.0% of the company. 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 American States Water Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. 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. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for American States Water (of which 1 is a bit concerning!) you should know about.
But note: American States Water may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
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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.
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