We recently published a list of 10 Small–Cap Stocks Insiders Are Buying Recently. In this article, we are going to take a look at where The York Water Company (NASDAQ:YORW) stands against other small–cap stocks insiders are buying recently.
Why should we be interested in stocks with smaller market capitalizations? Small-cap stocks usually operate in other industries than large-cap companies, meaning they will help investors diversify their portfolios. Also, the share price of small-cap stocks is often lower, which makes them more affordable. Some small-cap investors focus on finding young companies with strong growth potential, which can lead to high returns once they transition to large-cap stocks. While small-cap stocks often carry higher risks and are more prone to market volatility, they also offer investors more room for growth.
How to pick good small-cap stocks to invest in currently? While there’s no single simple or complicated rule that investors can follow to achieve secure results, there are some strategies that can help. One strategy is to keep track of insider trading activity. Insiders or, in other words, people at high positions within companies, such as CEOs, CFOs, directors and other executives have unparalleled insights into the company’s strategic moves, plans, and initiatives. A CEO’s investment in a company’s stock can sometimes signal strong confidence in the company’s future.
Insider trading activity should be assessed within the broader context of the company’s fundamentals, industry trends and overall market conditions, because behind insider moves can be various other motives. Heavy insider trading activity doesn’t necessarily mean the company is poised for growth. That’s why due diligence is of utmost importance before making any investment. Investors should also take into account and meticulously analyze underlying reasons for insider transactions. However, insider trading activity in combination with other relevant factors can offer valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
To come up with the 10 small-cap stocks insiders are buying recently, we only considered stocks with a market capitalization of between $250 million to $2 billion. We first used Insider Monkey’s insider trading screener and searched for stocks with at least two insiders buying shares in the last three months.
With each stock we note the number of recent insider purchases and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A reservoir at sunrise, reflecting the regulated water company’s commitment to providing reliable water services.
The York Water Company (NASDAQ:YORW)
Number of Insiders Buying: 7
Market Capitalization: $444.407 million
Over the past three months, seven insiders, including the President and CEO, and CFO purchased around $15,300 worth of the The York Water Company (NASDAQ:YORW) shares at an average price of $32.35 per share. The York Water Company’s shares are now trading at $31.72 having lost 3.07% year-to-date. Over the last 12 months, the shares declined 10.54% hitting the lowest price of $30.03 in January.
Five insiders used this January drop to acquire shares at a price of $31.25, while the two that bought the shares in November and December had to pay $35.66 and $34.60, respectively. This could suggest that the management is confident in the company’s future results, and that it just used the drop in the price to acquire more shares.
York Water Company (NASDAQ:YORW), which provides high-quality water and wastewater services to customers in Pennsylvania, has a history spanning over 200 years. It was founded in 1816 by a group of local businessmen wanting to do something about fire protection. Over the last 15 years, York Water Company shares gained 139.83%.
In December, The York Water Company (NASDAQ:YORW) closed on the acquisition of two water systems, one in York and the other in Adams County, and it also bought the water distribution system at the Brookhaven Mobile Home Community in Hallam Township, York County.
In January, the company’s management declared a quarterly dividend of $0.2192 per share. This was the company’s 617th consecutive dividend to be paid. The company touted it has never missed a dividend in over 209 years, and that this is believed to be the longest record of consecutive dividends in America.
Overall, YORW ranks 4th on our list of small–cap stocks insiders are buying recently. While we acknowledge the potential of YORW, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than YORW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.