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Recent gains in GrafTech International Ltd. (NYSE:EAF) help add back some value on insider purchases worth US$506k, still down US$166k

·3-min read

Some of the losses seen by insiders who purchased US$506k worth of GrafTech International Ltd. (NYSE:EAF) shares over the past year were recovered after the stock increased by 5.6% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$166k.

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.

Check out our latest analysis for GrafTech International

GrafTech International Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director Jean-Marc Germain for US$446k worth of shares, at about US$12.75 per share. That means that an insider was happy to buy shares at above the current price of US$8.50. 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 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. Jean-Marc Germain was the only individual insider to buy shares in the last twelve months.

Jean-Marc Germain bought a total of 40.00k shares over the year at an average price of US$12.65. 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!

insider-trading-volume
insider-trading-volume

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.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests GrafTech International insiders own 0.1% of the company, worth about US$3.3m. I generally like to see higher levels of ownership.

So What Do The GrafTech International Insider Transactions Indicate?

The fact that there have been no GrafTech International insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if GrafTech International insiders bought more shares in the company. While we like knowing 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. Be aware that GrafTech International is showing 2 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

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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