GEF

Greif ($GEF) Executives' Perfect Timing: What Post-Divestiture Repurchasing Signals Mean

11/14/2025 17:35

Greif ($GEF) is a 147-year-old industrial packaging company with a $1.6 billion market cap, specializing in steel drums, plastic containers, and corrugated packaging solutions worldwide. The company has built a strong position in sustainable packaging and recycling, serving diverse industries globally. However, the most compelling story around this small-cap stock over the past year isn't found in earnings reports or revenue figures—it's hidden in the precise timing of insider trades that reads like a well-orchestrated script. Between December 20-26, 2024, within just one week, Director Andrew Rose purchased $350,000 worth of shares while EVP Larry Hilsheimer accumulated $260,000 across four consecutive days. The stock was trading around $60 at the time. What did these insiders know? The answer came six months later. On June 9, 2025, shares suddenly spiked 18% from $54 to $64. Then on July 1st, news broke that Packaging Corporation of America would acquire Greif's containerboard division. The stock continued climbing to $69. But what happened next reveals the true insider playbook. President Ole Rosgaard immediately began massive selling, disposing of over 50,000 shares at $70 for $2.6 million. SEC filings specifically note these proceeds funded "the purchase of a new residence." SVP Kimberly Kellermann sold 9,000 shares at $67.60, while EVP Gary Martz dumped 29,000 shares for $2 million—all timing their exits perfectly at the post-announcement peak. The most intriguing trade came in November when EVP Lawrence Hilsheimer sold 33,851 shares at $59.58 for $2.02 million, then immediately repurchased 21,751 shares at $65.50. Why buy back at a higher price? This suggests confidence in the company's transformed value proposition post-divestiture. Shares have since retreated to the low $60s, essentially back to pre-announcement levels. But the company's fundamentals have actually improved. Recent quarterly EPS surged 1,497%, cash reserves increased from the divestiture proceeds, and the debt-to-equity ratio remains manageable at 45.66%. The 3.65% dividend yield adds attractive income potential. Wells Fargo recently raised its price target to $68, with analyst consensus at $72.60—implying 19% upside from current levels. Notably, while the P/E ratio of 25x aligns with industry averages, the P/S ratio of just 0.54x suggests significant undervaluation relative to revenue. Investors should watch three key scenarios unfolding. First, enhanced shareholder returns using divestiture proceeds. While the 89% dividend payout ratio limits further dividend increases, share buyback programs remain highly feasible. Second, margin expansion in core operations. The containerboard business was relatively low-margin, so focusing on higher-value packaging solutions should drive profitability improvements—already evident in recent operating margin gains. Third, strategic investments or acquisitions. Hilsheimer's higher-price repurchase signals conviction beyond mere portfolio rebalancing, potentially indicating upcoming value-creating initiatives. Risks include the 3.3% YoY revenue decline reflecting broader industry headwinds, and the July insider selling suggesting limited near-term upside catalysts. Ultimately, Greif appears well-positioned as a restructured, focused packaging company. The insider trading patterns demonstrate long-term conviction in the transformation story, making current levels attractive for value-oriented investors seeking both income and appreciation potential.