Investors who take an interest in Greif, Inc. (NYSE:GEF) should definitely note that the President, Peter Watson, recently paid US$24.79 per share to buy US$248k worth of the stock. Although the purchase only increased their holding by 5.5%, it is still a solid purchase in our view.
Greif Insider Transactions Over The Last Year
Notably, that recent purchase by President Peter Watson was not the only time they bought Greif shares this year. They previously made an even bigger purchase of US$491k worth of shares at a price of US$32.71 per share. That means that even when the share price was higher than US$28.05 (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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Greif insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Greif is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Greif insiders own about US$539m worth of shares (which is 35% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Greif Insiders?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Greif. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Greif. For instance, we've identified 3 warning signs for Greif (1 makes us a bit uncomfortable) you should be aware of.
Of course Greif 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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