Market cap

As Greenhill & Co., Inc.’s (NYSE:GHL) market cap drops to $160 million, insiders may question their decision to buy earlier this year

Insiders who acquired $3.4 million of Greenhill & Co., Inc. (NYSE:GHL) at an average price of US$13.63 over the past 12 months might be dismayed by the recent 13% price drop. Insiders invest in the hope that their money will increase in value over time. However, following recent losses, their initial investment is now only worth US$2.2 million, which is not what they expected.

While insider trading isn’t the most important thing when it comes to long-term investing, logic dictates that you should pay attention to whether insiders are buying or selling stocks.

See our latest analysis for Greenhill

Greenhill insider trades over the past year

Over the past year, we can see that the largest insider sale was by Chairman David Wyles for $1.2 million in stock, at around $18.27 per share. While we generally don’t like to see insider selling, it’s more of a concern if the selling takes place at a lower price. The good news is that this big sell off was well above the current price of US$8.80. It is therefore difficult to draw a firm conclusion. The only individual insider seller in the last year was David Wyles.

Over the past twelve months, insiders have purchased 248,350 shares for $3.4 million. But insiders sold 66,080 shares worth $1.2 million. Over the past twelve months, there have been more buying than selling by Greenhill insiders. You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. If you click on the chart, you can see all individual trades including stock price, individual and date!

NYSE: GHL Insider Trading Volume July 3, 2022

Greenhill isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

Greenhill insiders recently bought shares

Over the past three months, we have seen significant insider buying at Greenhill. Overall, two insiders paid $2.2 million for shares in the company — and none were sold. This shows some optimism about the future of the company.

Insider ownership

Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the business for the long term. Greenhill insiders appear to own 28% of the company, worth around $44 million. This level of insider ownership is good, but just short of being particularly noteworthy. This certainly suggests a reasonable degree of alignment.

So what does this data suggest about Greenhill insiders?

Recent insider buying is encouraging. And an analysis of last year’s transactions also gives us confidence. Insiders likely see value in Greenhill shares, given these transactions (as well as notable insider ownership of the company). While we like to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making any investment decisions. In terms of investment risks, we have identified 3 warning signs with Greenhill and understanding them should be part of your investment process.

Sure Greenhill may not be the best stock to buy. So you might want to see this free set of high quality companies.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.