A.O. Smith Director Trades $171K In Company Stock

Mark D Smith, Director at A.O. Smith (NYSE:AOS), reported an insider sell on July 29, according to a new SEC filing.

What Happened: Smith opted to sell 2,400 shares of A.O. Smith, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The transaction's total worth stands at $171,264.

During Wednesday's morning session, A.O. Smith shares down by 0.0%, currently priced at $71.64.

Unveiling the Story Behind A.O. Smith

A.O. Smith manufactures a broad lineup of water heaters, boilers, and water treatment products. The company has two reporting segments: North America (75% of sales) and rest of world (25% of sales). A.O. Smith is the leading manufacturer of water heaters in North America for the residential and commercial markets, with approximately 37% and 54% market share, respectively. Residential water heaters account for most of North American sales and are distributed equally through wholesale and retail channels. Most of A.O. Smith's international revenue is from China, a market the company entered during the mid-1990s. However, the firm announced a strategic review of its China operations.

Financial Insights: A.O. Smith

Revenue Challenges: A.O. Smith's revenue growth over 3 months faced difficulties. As of 30 June, 2025, the company experienced a decline of approximately -1.27%. This indicates a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Industrials sector.

Evaluating Earnings Performance:

• Gross Margin: The company excels with a remarkable gross margin of 39.27%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): A.O. Smith's EPS reflects a decline, falling below the industry average with a current EPS of 1.07.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.18.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 19.96 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 2.74 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 an EV/EBITDA ratio lower than industry benchmarks at 13.12, A.O. Smith presents an attractive value opportunity.

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

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Why Insider Activity Matters in Finance

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

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.

Transaction Codes Worth Your Attention

Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as 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 A.O. Smith's Insider Trades.

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