Insider Selling: TIMOTHY HORNE Unloads $1.06M Of Watts Water Technologies Stock

TIMOTHY HORNE, 10% Owner at Watts Water Technologies WTS, executed a substantial insider sell on May 24, according to an SEC filing.

What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Friday, HORNE sold 5,000 shares of Watts Water Technologies. The total transaction value is $1,061,150.

The latest update on Friday morning shows Watts Water Technologies shares down by 0.0%, trading at $210.17.

All You Need to Know About Watts Water Technologies

Watts Water Technologies Inc is a U.S.-based company that provides safety, energy efficiency, and water conservation products. Its product portfolio includes residential and commercial flow control products, which are sold for plumbing and hot water applications; HVAC and gas products, including commercial boilers, water heaters, heating solutions, and heating systems; drainage and water reuse products, including drainage products and engineered rainwater-harvesting solutions; and water quality products, including point-of-use and point-of-entry water filtration, conditioning, and scale prevention systems. The company generates the majority of its revenue from markets in the Americas and in Europe, the Middle East, and Africa.

Understanding the Numbers: Watts Water Technologies's Finances

Positive Revenue Trend: Examining Watts Water Technologies's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 21.03% as of 31 March, 2024, showcasing a substantial increase in top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Industrials sector.

Key Profitability Indicators:

• Gross Margin: The company sets a benchmark with a high gross margin of 46.86%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 2.17, Watts Water Technologies showcases strong earnings per share.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.18.

Navigating Market Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 26.08 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a P/S ratio of 3.27 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 16.86, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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Why Pay Attention to Insider Transactions

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Important Transaction Codes

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Watts Water Technologies's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.