Insider Decision: Martha Clark Goss Offloads $101K Worth Of American Water Works Stock

Martha Clark Goss, Board Member at American Water Works AWK, executed a substantial insider sell on September 5, according to an SEC filing.

What Happened: Goss's recent Form 4 filing with the U.S. Securities and Exchange Commission on Thursday unveiled the sale of 710 shares of American Water Works. The total transaction value is $101,423.

At Thursday morning, American Water Works shares are up by 0.89%, trading at $145.43.

All You Need to Know About American Water Works

American Water Works is the largest investor-owned us water and wastewater utility, serving approximately 3.5 million customers in 16 states. It provides water and wastewater services to residential, commercial, and industrial customers and operates predominantly in regulated markets. The company's nonregulated business is water services for military bases, which operates under long-term contracts with regulated-like returns.

American Water Works's Financial Performance

Positive Revenue Trend: Examining American Water Works's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 4.74% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. When compared to others in the Utilities sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Navigating Financial Profits:

• Gross Margin: With a high gross margin of 62.84%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): American Water Works's EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 1.42.

Debt Management: American Water Works's debt-to-equity ratio stands notably higher than the industry average, reaching 1.3. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Insights into Valuation Metrics:

• Price to Earnings (P/E) Ratio: American Water Works's current Price to Earnings (P/E) ratio of 29.42 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: The current P/S ratio of 6.47 is above industry norms, reflecting an elevated valuation for American Water Works's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 16.79, the company's EV/EBITDA ratio outperforms industry norms, reflecting positive market perception. This positioning indicates optimistic expectations for the company's future performance.

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

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Why Pay Attention to Insider Transactions

Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Understanding Crucial Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously 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 American Water Works's Insider Trades.

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