We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Mueller Water Products, Inc. (NYSE:MWA).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.
The Last 12 Months Of Insider Transactions At Mueller Water Products
In the last twelve months, the biggest single purchase by an insider was when Senior VP & Chief HR Officer Todd Helms bought US$130k worth of shares at a price of US$13.15 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$14.91. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
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!
Mueller Water Products is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Mueller Water Products
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Mueller Water Products insiders own about US$33m worth of shares. That equates to 1.4% 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.
So What Does This Data Suggest About Mueller Water Products Insiders?
It doesn't really mean much that no insider has traded Mueller Water Products shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Mueller Water Products and their transactions don't cause us concern. 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. While conducting our analysis, we found that Mueller Water Products has 1 warning sign and it would be unwise to ignore this.
But note: Mueller Water Products 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
