Insider Decision: Shashank Patel Offloads $324K Worth Of Watts Water Technologies Stock

A substantial insider sell was reported on May 24, by Shashank Patel, Chief Financial Officer at Watts Water Technologies WTS, based on the recent SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Friday outlined that Patel executed a sale of 1,508 shares of Watts Water Technologies with a total value of $324,370.

Tracking the Friday's morning session, Watts Water Technologies shares are trading at $210.17, showing a down of 0.0%.

Get to Know Watts Water Technologies Better

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.

A Deep Dive into Watts Water Technologies's Financials

Revenue Growth: Watts Water Technologies displayed positive results in 3 months. As of 31 March, 2024, the company achieved a solid revenue growth rate of approximately 21.03%. This indicates a notable increase in the company's top-line earnings. When compared to others in the Industrials sector, the company excelled with a growth rate higher than the average among peers.

Exploring Profitability:

• Gross Margin: The company maintains a high gross margin of 46.86%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Watts Water Technologies's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 2.17.

Debt Management: With a below-average debt-to-equity ratio of 0.18, Watts Water Technologies adopts a prudent financial strategy, indicating a balanced approach to debt management.

Market Valuation:

• Price to Earnings (P/E) Ratio: Watts Water Technologies's P/E ratio of 26.08 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The current P/S ratio of 3.27 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 16.86, Watts Water Technologies presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

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Unmasking the Significance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

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

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Essential Transaction Codes Unveiled

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates 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.