YORW

America's Oldest Water Utility York Water ($YORW) Sees Consistent Insider Buying as CEO and Management Show Confidence Despite Price Dips

03/31/2025 12:25

Top executives of America's oldest publicly traded water utility have been steadily buying company shares, drawing investor attention amid recent stock price volatility. York Water Company ($YORW) CEO Joseph Thomas Hand and other insiders have consistently purchased shares even during periods of price decline, with a notable cluster buying event occurring in January 2025 when the stock hit significant lows. $YORW has experienced considerable price fluctuations over the past year. After reaching highs above $40 from mid-July to early August 2024, the stock entered a downward trend, falling to the low $30s by mid-January 2025. Since then, it has partially recovered to the $34-35 range as of March 2025. Founded in 1816 and boasting 208 years of continuous operations, York Water is the oldest investor-owned water utility in the United States. The company serves approximately 190,000 people across 48 municipalities in Pennsylvania, providing both water and wastewater services. With a market capitalization of about $493 million, this small-cap stock features a beta of 0.61 (indicating lower volatility than the broader market) and currently offers an annual dividend of $0.88 per share, yielding 2.66%. Particularly noteworthy is the consistent buying pattern demonstrated by company insiders. CEO Joseph Thomas Hand purchased a total of 1,152.85 shares (worth approximately $40,000) across eight separate transactions from June 2024 through March 2025. All these purchases were executed through the company's dividend reinvestment plan (DRIP), suggesting management's focus on long-term value rather than short-term market fluctuations. Director Steven Rasmussen has also been a regular buyer, investing approximately $1,000 monthly from June 2024 through February 2025. Other senior executives, including CFO Matthew Poff and CAO Alexandra Chiaruttini, have likewise made quarterly stock purchases. A standout event occurred on January 16, 2025, when six insiders—including the CEO, CFO, and CAO—simultaneously purchased shares as the stock traded at $31.25. Such cluster buying often serves as a strong signal that management believes the current stock price undervalues the company. Despite this show of confidence, York Water's financial performance has been under pressure in recent quarters. Second-quarter 2024 earnings per share came in at $0.35, down from $0.45 in the same period the previous year. This downward trend continued with third-quarter earnings of $0.41 (versus $0.53 year-over-year) and fourth-quarter results of $0.36 (versus $0.42 year-over-year). While 2024 annual revenue increased 5.53% to $74.96 million, net income declined 14.45% to $20.33 million compared to the previous year. Despite these performance challenges, analysts maintain a 'strong buy' rating on York Water with a median price target of $42—more than 20% above the current price of $34.76. This positive outlook reflects confidence in the utility's stable business model and management expertise proven through two centuries of operations. The utility sector has recently regained investor attention amid expectations of interest rate cuts. As inflation stabilizes and the Federal Reserve began cutting rates in September 2024, the appeal of dividend-yielding utility stocks has increased. While York Water trades at a P/E ratio of 24.14, somewhat higher than industry averages, its 208-year operating history and reliable cash flows may justify this premium. Investors should note certain risk factors, however. The company's debt-to-equity ratio stands at 89.1%, which is relatively high and could lead to increased financing costs if interest rates rise again. Additionally, as a regulated water utility, the company faces limitations on rate increases, potentially squeezing margins in inflationary environments. Nevertheless, the consistent share purchases by York Water's management team represent a significant vote of confidence in the company's long-term prospects. Their commitment to the dividend reinvestment plan demonstrates a focus on sustainable growth and reliable shareholder returns rather than short-term gains. In conclusion, the insider trading pattern at York Water suggests that management views current performance challenges as temporary and believes the stock's fundamental value and growth potential are not fully reflected in the current share price. For conservative investors seeking dividend income and stable long-term growth, the current price level may present a worthwhile opportunity for consideration.

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