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Over the past year, many Otis Worldwide Corporation (NYSE:OTIS) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Otis Worldwide
Otis Worldwide Insider Transactions Over The Last Year
The Executive VP & Chief Product, Peiming Zheng, made the biggest insider sale in the last 12 months. That single transaction was for US$1.6m worth of shares at a price of US$93.69 each. That means that an insider was selling shares at slightly below the current price (US$98.02). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 52% of Peiming Zheng's holding.
Insiders in Otis Worldwide didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Otis Worldwide better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insiders At Otis Worldwide Have Sold Stock Recently
The last quarter saw substantial insider selling of Otis Worldwide shares. In total, insiders dumped US$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does Otis Worldwide Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Otis Worldwide insiders own 0.1% of the company, worth about US$54m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.