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Multiple Insiders Sold Graham Holdings Shares Presenting Weak Signs For Investors
Graham Holdings Company (NYSE:GHC) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Graham Holdings
The Last 12 Months Of Insider Transactions At Graham Holdings
Over the last year, we can see that the biggest insider sale was by the Independent Director, Katharine Weymouth, for US$396k worth of shares, at about US$713 per share. That means that even when the share price was below the current price of US$732, 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. 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. We note that the biggest single sale was only 22% of Katharine Weymouth's holding.
In the last twelve months insiders purchased 335.00 shares for US$218k. But insiders sold 631.00 shares worth US$443k. In total, Graham Holdings insiders sold more than they bought over the last year. They sold for an average price of about US$702. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insiders At Graham Holdings Have Bought Stock Recently
It's good to see that Graham Holdings insiders have made notable investments in the company's shares. Independent Chairman of the Board Anne Mulcahy spent US$101k on stock, and there wasn't any selling. This makes one think the business has some good points.
Does Graham Holdings Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Graham Holdings insiders own about US$750m worth of shares (which is 23% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Graham Holdings Insiders?
It's certainly positive to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Graham Holdings (1 is a bit concerning!) that we believe deserve your full attention.
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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 of direct interests only, but not derivative transactions or indirect interests.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
About NYSE:GHC
Graham Holdings
Through its subsidiaries, operates as a diversified holding company in the United States and internationally.
Solid track record with excellent balance sheet.
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