Shashank Patel, Chief Financial Officer at Watts Water Technologies WTS, disclosed an insider sell on November 12, according to a recent SEC filing.

What Happened: After conducting a thorough analysis, Patel sold 5,933 shares of Watts Water Technologies. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The total transaction value is $1,239,621.

In the Tuesday’s morning session, Watts Water Technologies‘s shares are currently trading at $209.41, experiencing a down of 1.21%.

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.

Breaking Down Watts Water Technologies’s Financial Performance

Revenue Growth: Over the 3 months period, Watts Water Technologies showcased positive performance, achieving a revenue growth rate of 7.79% as of 30 September, 2024. This reflects a substantial 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.

Profitability Metrics: Unlocking Value

• Gross Margin: The company sets a benchmark with a high gross margin of 47.3%, reflecting superior 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 2.07.

Debt Management: With a below-average debt-to-equity ratio of 0.13, Watts Water Technologies adopts a prudent financial strategy, indicating a balanced approach to debt management.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 25.42 is lower than the industry average, implying a discounted valuation for Watts Water Technologies’s stock.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 3.14, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Watts Water Technologies’s EV/EBITDA ratio at 15.73 suggests potential undervaluation, falling below industry averages.

Market Capitalization Analysis: The company’s market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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The Importance of Insider Transactions

Insider transactions, although significant, should be considered within the larger context of market analysis and trends.

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.

Unlocking the Meaning of Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes 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.

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