GEF

Greif ($GEF) CEO's $2M+ Stock Sale Raises Eyebrows Despite Business Restructuring Success

11/13/2025 22:12

Greif Inc. ($GEF) is a leading industrial packaging company specializing in steel, fiber, and plastic containers, intermediate bulk containers (IBCs), and containerboard products. Serving diverse industries including chemicals, food and beverage, agriculture, and manufacturing, this small-cap company with approximately $1.6 billion market capitalization provides sustainable packaging solutions globally. Investors should pay close attention to the dramatic shift in CEO Lawrence Hilsheimer's trading pattern. In December 2024, he aggressively purchased shares in the $67-72 price range through consecutive transactions, demonstrating strong conviction in the company's prospects during a period of upward momentum. However, the situation completely reversed in November 2025. On November 11, Hilsheimer sold a massive 33,851 shares at an average price of $59.58, realizing approximately $2.02 million. The following day, he repurchased 21,751 shares at $65.50, but this was significantly smaller than his sale. This insider trading pattern carries significance beyond personal portfolio management. President Ole Rosgaard also engaged in substantial selling between July and September 2025, disposing of over 50,000 shares in the $70 price range from July 1-3. According to SEC filings, Rosgaard used the proceeds for purchasing a new residence, though the timing raises questions. The key catalyst is the September 2025 completion of the containerboard business divestiture. Greif sold this division to Packaging Corporation of America, reshaping its business portfolio. Post-sale, the company revised its 2025 guidance to $507-517 million in adjusted EBITDA, reflecting the streamlined operations. From a financial perspective, Greif's current situation is complex. Trailing twelve-month revenue of $4.29 billion decreased 3.3% year-over-year through June 2025, yet quarterly earnings growth exploded to 1,496.7%. This dramatic improvement likely includes one-time factors or divestiture effects. Current profit margin of 21.36% indicates significantly improved operational efficiency. Stock price movements show volatility typical of restructuring periods. From $61 in June 2024, shares climbed to near $70 in November 2024, plunged to the low-$50s in April-May 2025, and currently trade around $60. The dividend policy maintains a healthy 3.71% yield with an 89% payout ratio. While elevated, stable cash flow should support dividend sustainability. The debt-to-equity ratio of 45.66% remains at industry-appropriate levels. The critical investment variable going forward is the growth potential of the remaining core packaging operations post-divestiture. While containerboard was a commodity-like, lower-margin business, specialized industrial packaging offers higher value-added opportunities. If the restructuring successfully improves profitability, current price levels could prove attractive. However, the implications of Hilsheimer's November sale cannot be ignored. His shift from aggressive buying in late 2024 to substantial selling less than a year later may signal changing views on near-term prospects beyond mere portfolio rebalancing. The packaging industry faces headwinds, with major players including International Paper and Packaging Corporation of America facing price-fixing class action lawsuits that could pressure sector profitability. In this environment, Greif's business sale may prove prescient. Investors should consider multiple scenarios. Optimistically, the cash from divestiture and focused business structure could drive significant margin expansion, making current $60+ prices attractive. Pessimistically, limited growth drivers in remaining operations and continued industry pressures could push shares back toward the low-$50s. Key monitoring points include the next quarterly earnings, which will reveal the true profitability and growth outlook of the restructured business, and any additional CEO trading activity.