Stock Analysis

Insiders who placed huge bets on GrafTech International Ltd. (NYSE:EAF) earlier this year would be disappointed with the 6.5% drop

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Insiders who bought US$506k worth of GrafTech International Ltd.'s (NYSE:EAF) stock at an average buy price of US$12.65 over the last year may be disappointed by the recent 6.5% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$174k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for GrafTech International

The Last 12 Months Of Insider Transactions At GrafTech International

Over the last year, we can see that the biggest insider purchase was by Independent Director Jean-Marc Germain for US$446k worth of shares, at about US$12.75 per share. That means that even when the share price was higher than US$4.35 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Jean-Marc Germain.

Jean-Marc Germain bought a total of 40.00k shares over the year at an average price of US$12.65. 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!

NYSE:EAF Insider Trading Volume September 30th 2022

GrafTech International is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests GrafTech International insiders own 0.1% of the company, worth about US$1.7m. We consider this fairly low insider ownership.

What Might The Insider Transactions At GrafTech International Tell Us?

It doesn't really mean much that no insider has traded GrafTech International shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if GrafTech International insiders bought more shares in the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for GrafTech International you should be aware of, and 1 of these is significant.

But note: GrafTech International 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. We currently account for open market transactions and private dispositions, but not derivative transactions.

What are the risks and opportunities for GrafTech International?

GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide.

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  • Trading at 9% below our estimate of its fair value

  • Earnings have grown 2.5% per year over the past 5 years


  • Earnings are forecast to decline by an average of 39.4% per year for the next 3 years

  • Has a high level of debt

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