Stock Analysis

The President & Director of Galaxy Digital Holdings Ltd. (TSE:GLXY), Christopher Ferraro, Just Sold 30% Of Their Holding

TSX:GLXY
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Anyone interested in Galaxy Digital Holdings Ltd. (TSE:GLXY) should probably be aware that the President & Director, Christopher Ferraro, recently divested CA$318k worth of shares in the company, at an average price of CA$6.64 each. That sale was 30% of their holding, so it does make us raise an eyebrow.

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Galaxy Digital Holdings Insider Transactions Over The Last Year

The Head of Galaxy Interactive, Sam Englebardt, made the biggest insider sale in the last 12 months. That single transaction was for CA$743k worth of shares at a price of CA$1.64 each. That means that even when the share price was below the current price of CA$7.12, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 81% of Sam Englebardt's holding.

In total, Galaxy Digital Holdings insiders sold more 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 November 24th 2020

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.8% of Galaxy Digital Holdings shares, worth about CA$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Galaxy Digital Holdings Insider Transactions Indicate?

Insiders sold Galaxy Digital Holdings shares recently, but they didn't buy any. 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. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Galaxy Digital Holdings (1 is potentially serious!) and we strongly recommend you look at them before investing.

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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