Numerous Graham Holdings Insiders Sold Stock: Not A Positive Omen

A number of Graham Holdings Company (NYSE:GHC) insiders sold their shares in the last year, which may have raised concerns among investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. 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 do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Graham Holdings

Graham Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Katharine Weymouth, sold US$396k worth of shares at a price of US$713 per share. That means that even when the share price was below the current price of US$779, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 22% of Katharine Weymouth's holding.

Over the last year, we can see that insiders have bought 335.00 shares worth US$236k. On the other hand they divested 631.00 shares, for US$443k. Over the last year we saw more insider selling of Graham Holdings shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insiders At Graham Holdings Have Bought Stock Recently

Over the last quarter, Graham Holdings insiders have spent a meaningful amount on shares. Specifically, Independent Director Thomas Gayner bought US$74k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

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. We usually like to see fairly high levels of insider ownership. It's great to see that Graham Holdings insiders own 22% of the company, worth about US$741m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Graham Holdings Tell Us?

It's certainly positive to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. While it's good to be aware of 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 Graham Holdings you should be aware of, and 1 of them is a bit concerning.

But note: Graham Holdings 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 of direct interests only, but not derivative transactions or indirect interests.

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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.