Badger Meter enters its next earnings window with an unusual split: the CEO and several senior executives stepped in to buy shares at the lows, while short sellers have spent the month building one of the stock's most aggressive positions in recent history.
The insider signal is hard to dismiss. On April 21, five Badger Meter executives bought shares in a single session — including Chairman and CEO Kenneth Bockhorst, who added 2,200 shares at roughly $117.50, putting about $258,000 of his own capital to work. An EVP added another 1,000 shares two days later at $122. Combined, the cluster represents over $777,000 in open-market purchases across a four-day window. These weren't token buys. The purchases came immediately after the stock's post-earnings collapse — a sign that management believes the market's reaction overshot.
The short interest tells a sharply different story. At 11.1% of free float, BMI's short position has climbed from 8.8% in mid-March — a rise of more than two percentage points in six weeks. The one-week gain alone is 9.2%, and the month-over-month increase is 23%. That pace of accumulation is notable for a stock of this profile. The ORTEX short score has tracked the move, reaching 60.9 on April 28 — its highest level in the observed window. Days to cover from the latest FINRA fortnightly read stands at 10.4, a figure that underscores just how concentrated the short book has become relative to average trading volume. Despite that buildup, borrow costs remain easy at 0.36% annualised, down 13% on the week — the lending market is well-supplied and shorts are getting in cheaply.
The Street has been cutting targets aggressively since earnings. Following the April 17 print, JP Morgan, Stifel, Baird, and RBC all trimmed price targets by 14–20%, while maintaining positive ratings. Maxim Group went further, downgrading from Buy to Hold on April 23. The consensus stays at Hold, with a mean target around $147 against a current price of $118 — implying roughly 24% upside, but that gap reflects targets set before the full reset, so take it with some caution. Bulls are anchored on the long-run structural shift from mechanical to ultrasonic and smart meters driving higher average selling prices. Bears point to slowing short-cycle orders and the wind-down of large AMI deployments as near-term headwinds, with the stock firmly in what one analyst described as "the penalty box" until growth re-accelerates. The EV/EBITDA multiple has compressed to around 15x, a 30-day decline of roughly 10%. EPS momentum factor scores rank in the 5th percentile over 30 days and 10th over 90 days — the estimate revisions cycle has been decidedly negative.
The April 17 earnings reaction puts numbers to the bearish case: the stock fell 25.5% on the day and lost a further 20% over the following week. That scale of move explains why short sellers have remained active even after the drop, and why the insider cluster was significant enough to draw attention. Options positioning, by contrast, remains broadly constructive. The put/call ratio of 0.29 is modestly above its 20-day average of 0.27 but well below historical stress levels — the 52-week high PCR is 1.31, meaning options traders are nowhere near peak defensiveness despite the price decline.
The setup heading into the May 21 earnings call is therefore defined by two competing signals: management buying into weakness versus a short book that keeps growing. What the next print reveals about short-cycle order trends and whether AMI project momentum has genuinely stabilised will determine which side of that trade looks better placed.
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