As GrafTech International Ltd.'s market cap (NYSE:EAF) drops to US$1.2b, insiders might be questioning their decision to buy earlier this year
The recent price decline of 9.1% in GrafTech International Ltd.'s (NYSE:EAF) stock may have disappointed insiders who bought US$506k worth of shares at an average price of US$12.65 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$184k, which is not great.
While insider transactions are not the most important thing when it comes to long-term investing, 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
In the last twelve months, the biggest single purchase by an insider was when Independent Director Jean-Marc Germain bought US$446k worth of shares at a price of US$12.75 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$4.61). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Jean-Marc Germain.
Jean-Marc Germain purchased 40.00k shares over the year. The average price per share was US$12.65. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does GrafTech International Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own US$1.8m worth of GrafTech International stock, about 0.1% of the company. I generally like to see higher levels of ownership.
So What Do The GrafTech International Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more GrafTech International stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for GrafTech International you should be aware of, and 1 of these shouldn't be ignored.
Of course GrafTech International may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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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.
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