We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Graham Corporation (NYSE:GHM), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Graham
Over the last year, we can see that the biggest insider sale was by the VP of Finance & Administration, Jeffrey Glajch, for US$84k worth of shares, at about US$28.42 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$21.09). So it is hard to draw any strong conclusion from it.
In the last twelve months insiders netted US$216k for 14590 shares sold. In the last year Graham insiders didn’t buy any company stock. You can see a visual depiction of insider transactions (by 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!
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 3.4% of Graham shares, worth about US$7.1m, according to our data. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At Graham Tell Us?
The fact that there have been no Graham insider transactions recently certainly doesn’t bother us. The insider transactions at Graham are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Graham.
But note: Graham may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.