Anyone interested in Graham Holdings Company (NYSE:GHC) should probably be aware that the Independent Director, Katharine Weymouth, recently divested US$396k worth of shares in the company, at an average price of US$713 each. The eyebrow raising move amounted to a reduction of 22% in their holding.
Graham Holdings Insider Transactions Over The Last Year
Notably, that recent sale by Katharine Weymouth is the biggest insider sale of Graham Holdings shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of US$709. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
All up, insiders sold more shares in Graham Holdings than they bought, over the last year. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Graham Holdings
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. It's great to see that Graham Holdings insiders own 17% of the company, worth about US$538m. 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?
An insider sold Graham Holdings shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. But since Graham Holdings is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. When we did our research, we found 3 warning signs for Graham Holdings (1 is significant!) that we believe deserve your full attention.
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.