Stock Analysis

How Much Are Galaxy Digital Holdings Ltd. (TSE:GLXY) Insiders Taking Off The Table?

TSX:GLXY
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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Galaxy Digital Holdings Ltd. (TSE:GLXY), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for Galaxy Digital Holdings

The Last 12 Months Of Insider Transactions At Galaxy Digital Holdings

Over the last year, we can see that the biggest insider sale was by the insider, Greg Wasserman, for CA$1.8m worth of shares, at about CA$7.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$17.03. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 37% of Greg Wasserman's stake.

All up, insiders sold more shares in Galaxy Digital Holdings than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
TSX:GLXY Insider Trading Volume March 9th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Galaxy Digital Holdings Have Sold Stock Recently

The last three months saw significant insider selling at Galaxy Digital Holdings. In total, insiders sold CA$3.5m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Galaxy Digital Holdings insiders own about CA$32m worth of shares. That equates to 0.6% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Galaxy Digital Holdings Insiders?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Galaxy Digital Holdings is showing 4 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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