Quite a few Graham Holdings Company (NYSE:GHC) insiders sold their shares over the past year, which may be a cause for concern. 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, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Graham Holdings Insider Transactions Over The Last Year

The Independent Director, Katharine Weymouth, made the biggest insider sale in the last 12 months. That single transaction was for US$396k worth of shares at a price of US$713 each. That means that an insider was selling shares at around the current price of US$700. While insider selling is a negative, to us, it is more negative if the shares are sold 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.

Over the last year, we can see that insiders have bought 335.00 shares worth US$218k. But they sold 631.00 shares for US$443k. Over the last year we saw more insider selling of Graham Holdings shares, than buying. The sellers received a price of around US$702, on average. It's not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Graham Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Graham Holdings Insiders Bought Stock Recently

It's good to see that Graham Holdings insiders have made notable investments in the company's shares. We can see that Independent Chairman of the Board Anne Mulcahy paid US$101k for shares in the company. No-one sold. That shows some optimism about the company's future.

Does Graham Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Graham Holdings insiders own 23% of the company, worth about US$717m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Graham Holdings Insiders?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The recent buying by an insider , along with high insider ownership, suggest that Graham Holdings insiders are fairly 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. For instance, we've identified 2 warning signs for Graham Holdings (1 makes us a bit uncomfortable) you should be aware of.

Of course Graham Holdings 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 of direct interests only, but not derivative transactions or indirect interests.

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